(Adds comment from California ISO and background)
By Scott DiSavino
June 26 (Reuters) - California power prices edged higher on forecasts for increased cooling demand during a heat wave and amid the unexpected shutdown of a giant nuclear power reactor, power traders said Wednesday.
Next-day prices in northern and southern California climbed about 20 percent from the low to mid $40s per megawatt hour for Wednesday to the low to mid $50s for Thursday, traders said.
Prices for Monday were offered in the low $60s, up more than 10 percent from later this week.
“We are always preparing for the next day, next week and next month and right now are preparing for the heat wave,” Stephanie McCorkle, a spokeswoman for the California ISO told Reuters, noting the grid is now “forecasting normal operations for next week.”
She cautioned however that “fires, increasing plant or power line outages, and any number of other factors could create grid challenges at any point during the peak (summer) demand season.”
The ISO operates the power grid for most of California and parts of Nevada.
High temperatures in Los Angeles are forecast to reach 82 degrees F on Wednesday, 86 on Thursday, 90 on Friday, 92 on Saturday, 90 on Sunday, 88 on Monday and 82 on Tuesday.
On Wednesday, California power company PG&E Corp shut the 1,122-megawatt (MW) Unit 1 at its Diablo Canyon nuclear power plant in California due to a leak inside containment. There was no release of radiation.
One megawatt can power about 800 homes.
Traders guessed it would take about a week for PG&E to fix the leak and get the reactor back on line.
“I think this will stress California quite a bit, given that it’ll be getting warmer in many parts,” one trader said, noting the grid “may be dodging a direct hit with the heat and cooling load coming Friday and over the weekend.”
The loss of Diablo Canyon 1 follows California power company Edison International’s decision earlier this month to permanently retire its 2,150-MW San Onofre nuclear plant in southern California due to the uncertain timing and cost of repairing its two reactors. The San Onofre reactors have been shut since January 2012.
In the spring, reliability regulators warned California could face “operational challenges” from the San Onofre shutdowns and that a prolonged heat wave could force utilities to use rolling blackouts in the San Diego and Los Angeles areas to keep the grid reliable.
The ISO forecast peak demand would reach about 38,100 MW on Wednesday, 40,600 MW on Thursday, 42,400 MW on Friday, 40,400 MW on Saturday, 40,200 MW on Sunday and 45,700 MW on Monday and 45,600 MW on Tuesday. That’s still well below the ISO’s record demand of over 50,270 MW set in July 2006, the ISO said.
There are about 57,000 MW of power capacity installed in the California ISO and the grid has the ability to import about 10,000 MW from other regions.
The biggest power companies in California are units of PG&E, Edison International and Sempra Energy. (Additional reporting by Joe Silha in New York; Editing by Bernadette Baum and Chris Reese)