ACHRNEWS

May 30, 2006: Electric Generating Capacity Expected to be Tight This Summer

May 30, 2006
PRINCETON, N.J. - Electricity supplies are failing to keep pace with growing demand in many parts of the United States, causing shrinking reserves of generating capacity needed to meet unexpected power needs, according to the North American Electric Reliability Council (NERC).

Rick Sergel, NERC president and CEO, stated, "Although generating capacity resources will increase over last summer, peak demands are also increasing, and we are seeing a decline in capacity margins in most regions. While generating resources and transmission capability will be adequate to serve the electricity demand for this summer under normal weather conditions, extreme weather continues to present a significant reliability risk in those areas with lower margins."

Regional capacity margins are lowest in the Northeast, northern Midwest, and the Tennessee Valley. As in previous years, NERC's 2006 Summer Assessment warns of particularly tight electricity supplies in Southern California and southwestern Connecticut.

But this year NERC is also concerned about utilities that depend on coal deliveries from the Powder River Basin in north-central Wyoming and southeast Montana. In 2005, flooding and derailments caused railroad track damage that limited coal deliveries to a number of power plants. Although deliveries are now increasing and the track is being repaired, coal inventories are still low in the area.

Publication date: 05/29/2006