America's Power Play

The last few weeks have been brutal with heat hot enough to kill more than 250. Facing record demand, the power industry feels it kept its cool.

"I think when you're looking at the wide geographical region that we're talking about and literally the tens of millions of people involved, yes, I think we did a great job," says Bill Brier, of the Edison Electric Institute.

But it is a job that's clearly becoming more demanding, reports CBS News Correspondent Jim Axelrod. Americans are now consuming power four times faster than the growth of the nation's supply.

Which is why they've been sweating at Ameren, the power company for one million customers in and around St. Louis. "It was 103 and real humid here," says Alan Kelley, vice president of Ameren Corporation. "And it was every thing we could do to meet it."

Ameren, like many utilities around the country, gets a hand from deregulation, which has eased the buying and selling and moving of electricity across state lines. So if a heat wave drains electricity in Missouri, and Ameren finds a supply for sale in Florida, St. Louis can be re-supplied with a flip of the switch.

The growing power in power production is the trading floor, not the electric plant. In the last two years, between 10 and 15 per cent of the electricity Ameren has sold to its customers was bought from other utilities rather than generated themselves.

"Power is traded 24 hours a day, seven days a week," Kelley says.

While the power trading business has doubled this decade, it's just the opposite trend for the nation's "buffer supply" -- the extra power used to deal with summers like this one. The answer, say independent analysts, is not building more trading floors, but more power plants.

"That can make things more efficient up to a point. But there's a limit to how much you can do with that. At some point you have to bring on new capacity to meet the growing demand," says Jay Hakes of the Energy Information Administration.

The next five years should see enough new plants come online to raise the buffer supply to more comforting levels. But with air conditioning raising the average family power bill $100 a summer, there is plenty of incentive for another way to stretch the existing supply: conservation.