Will It Happen Here?

Actress and UNICEF Ambassador Tea Leoni shows off her gown on the red carpet at the Third Annual UNICEF Snowflake Ball at Cipriani's 42nd Street in New York Nov. 28, 2006.
GETTY IMAGES/Evan Agostini
As the rest of the nation watches California struggle to keep the power turned on, people ask, will it happen here?

Probably not.

California electricity woes stand out as the exception, not the rule. While California has run out of power, most states have power reserves of over 15 percent, CBS News Correspondent Bob Orr reports.

"Folks around the nation generally should remain confident that the power they want will be there, supplied when they need it," said Frank Heintz, president of Baltimore Gas & Electric.

It all has to do with the basic law of supply and demand. In 10 years, California has not built one new power plant, while other states like Maryland have kept ahead of demands by building plants. Power supplier Todd Carter says it's the profit promised by deregulation that makes construction worth it.

"Within one month we'll have 9,000 megawatts of capacity that's either under construction on in operation. We would not have those 9,000 megawatts where we are today if it wasn't for deregulation," said Carter, president of Panda Energy International.

Twenty-four states and the District of Columbia are in various phases of deregulation and most are building new power plants to take advantage of the relaxed regulations.

Most new power plants don't need to be in states that have power shortages such as California to turn a hefty profit: power can be shunted across several states via the power line networks in place.

Also, various kinds of electricity generators can be built to take advantage of high-demand times such as the summer, when air conditioners and other voltage-eating devices are in full operation. Peaking plants that lie dormant during low-demand times can be built to run when demand is high.

But some states like Oregon, which supply power to and are badly shaken by the California crisis, are rethinking plans to deregulate their hydroelectric systems.

"We have thrown ourselves on the mercies of the market, and now we have a system that is not reliable, not predictable, and potentially not affordable," said Oregon U.S. Rep. Peter DeFazio, a Democrat. "Why are we doing this?"

The reason is simple, electric industry analysts say: there is no other way to keep up with America's insatiable hunger for electricity "because incentives will be in the marketplace for people to make investments in power plants and in transmission systems, so that we do actually, as customers, eventually have choice and hopefully lower prices," said Bill Brier of the Edison Electric Institute.

Utilities admit it's a time of uncertainty, but unless we're ready to curb our appetite for power, they insist that building new plants is the only option.