Electric group warns of dark times

October 16, 2006|By New York Times News Service

WASHINGTON -- Companies are not building power plants and power lines fast enough to meet growing demand, according to a group recently assigned by the federal government to assure proper operation of the power grid.

The North American Electric Reliability Council, in its annual report - to be released today - said the amount of power that could be generated or transmitted would drop below the target levels meant to ensure reliability on peak days in Texas, New England, the Mid-Atlantic area and the Midwest during the next two to three years.

The council was established in 1965 after a blackout across the Northeast and has since set voluntary standards for the industry. After the blackout of 2003, which covered a vast swath of the Midwest, Northeast and Ontario, Canada, Congress set up a process that will give the council the authority to fine American companies that do not follow certain operating standards. It is seeking a similar designation in Canada because - electrically speaking - the border is irrelevant.

For years, the council has produced often-gloomy annual reports, but this is the first to be officially filed with federal agencies - and to recommend specific action.

The report says that utilities should pursue financial incentives for customers to cut use during peak hours, thereby lowering demand for new power plants and transmission lines. Financial incentives could reward customers' installation of more efficient equipment or, more drastically, reward a factory for closing on a day when electricity supplies are expected to be tight.

The president of the council, Rick P. Sergel, said, "The situation has existed for a long time, but we cannot let it continue."

Planning for adequate capacity has become more difficult with the restructuring of the electricity industry. Where a handful of top-to-bottom companies once generated power, transmitted it and delivered it, now hundreds of companies are involved in only one or two phases of the process. At the same time, getting permits to build new power lines has become more difficult.

The actual balance between supply and demand depends in part on changes in technology. Grid operators can now push more power through existing lines, plant operators have found ways to make generators more reliable, and sharp increases in the efficiency of how electricity is used could slow demand.

The report predicts demand will increase by about 19 percent over the next 10 years in the United States and slightly less in Canada, and that the construction of power plants and transmission lines to carry that load will fall far short of what is needed. In this country, only about a third of the new plants that will be needed are under construction; in Canada, the number is about two-thirds.

The number of miles of transmission lines, which can help redistribute supplies, will increase by only about 7 percent, the report said.

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