U.S.

Summer Power Crunch Looming

July 6, 2000 / 10:25 AM EDT / AP

A New Hampshire nuclear power plant is out of business for a few days, and folks throughout New England are asked to conserve electricity.

A blistering heat wave and problems at a power station hundreds of miles away force electricity distributors in California to scramble.

With growing demand for electricity and a power industry in the midst of a rocky transition, customers are facing another summer of tight electricity supplies - and possible rolling blackouts in some parts of the country.

Federal officials and the power industry blame some of the problems on the lack of adequate transmission lines, antiquated switching systems and uncertainty about the direction the industry is going, including the quickening pace of deregulation.

Next week Congress will consider legislation aimed at speeding up the restructuring of the $220 billion electric utility industry, including provisions that would impose new requirements to help ensure reliability. The Senate last week approved a bill that would establish a new organization that would monitor and enforce reliability rules.

Why the shortage?

Here is a list of the major causes of the brownout threat:

A growing economy, as well as increased use of computers and other electric devices, is increasing electricity demand by about 2 percent a year, without comparable increases in power generation. Peak demand this summer is expected to be at least 1.7 percent higher than last summer.

Transition to a more competitive electric industry has been rocky, making some companies reluctant to invest in new power plants and distribution lines. While 24 states have taken some action to open markets to more competition, Congress has struggled to agree on national legislation.

Wholesale power transmission systems are becoming increasingly congested with more power moving between regions as local markets are opened to outside competition. There were 200,000 electricity transactions on the system in 1997. This year, the number is expected to exceed 1.5 million, the electric power industry says.

Utilities have cut back on energy efficiency programs as they compete in trying to produce the lowest priced electricity. While there is a move toward more efficient federal standards for appliances and air conditioning systems, customer incentives to purchase such equipment has lagged.

Source: The Associatd Press

"The existing scheme of voluntary compliance with voluntary industry reliability rules is simply no longer adequate," says Sen. Frank Murkowski, R-Alaska, chairman of the Senate Energy and Natural Resources committee.

But even if Congress acts, it will come too late to ease power supply concerns this summer.

Power problems already have surfaced in New England and California and "could be an ominous sign" of things to come with the hottest months of the summer just ahead, said Energy Secretary Bill Richardson, who has toured the country for a series of electricity reliability meetings in recent months.

"The view (at these meetings) was unanimous. If we don't work together and fix the problem, we'll all end up sitting in the dark," Richardson said Wednesday. He said he was particularly concerned about potential power outages in the Southwest, California and parts of the Northeast, although other areas could be affected if there are unexpected breakdowns at power plants or an unusual heat wave.

Spurred on by the growing economy and increased reliance on computers and other electrical devices, electricity demand has been increasing about 2 percent a year, while generation capacity has lagged. The safety cushion between expected demand under normal circumstances and maximum electricity generation has been narrowing and now is less than 14 percent of capacity, according to industry figures. Not long ago it was nearly 25 percent, said a senior DOE official.

Signs of problems have already shown up this summer.

For most of last week, California was under a "stage II power watch" in which customers were asked to keep down electricity use and power was withheld from some commercial users because of tight supplies as temperatures soared in the 100-degree range. Two weeks earlier, rolling blackouts moved through the San Francisco Bay area after some power generators failed during a record 103 degree heat wave.

"A lot of electricity is being bought and sold. ... The system is stressed," said Bill Brier, vice president for communications at the Edison Electric Institute, the trade group for investor-owned utilities.

New power plants, mostly small, natural gas-fired units, have been built since last summer in the Southeast, Midwest and Texas, easing supply concerns for this summer. But few plants have been built in the West and Southwest. In New England, most of the new generation is still in the planning stage.

"Companies have been very gun-shy to make investments (in new plants and power lines) because the rules aren't clear," said Brier.

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