Posted on 03/24/2002 10:20:24 PM PST by Ernest_at_the_Beach
California could be strapped for power by 2004 because new power plants slated to be built by then might not be finished in time to meet increased demand, the California Energy Commission has warned.
Claudia Chandler, assistant executive director of the commission, said the demand for power in 2004 is expected to top 62,150 megawatts -- 4,450 megawatts more than is anticipated for this summer. A megawatt of electricity can power 750 houses.
But that doesn't necessarily mean the state will be plunged into rolling blackouts, she said. That depends on a host of factors, including an extraordinarily hot summer and whether the power plants that are scheduled to come on line by 2004 actually do so.
"There's been some foot-dragging in the licensing process of some of the plants," she said. "We need them to come on line when they said they were going to."
She said power generators that applied for the licensing process last year were gung-ho because the free-market system the state found itself in last year allowed them to make huge profits on selling energy, and many applied for licenses to build plants to capitalize on the hot market.
Then, with Gov. Gray Davis imposing price caps that are supposed to run through October, there was a gradual realization that those types of profit margins would go by the wayside.
"Last year was a boom (in the energy market) and you saw some generators proposing power plants under the assumption that it would go on into the future," Chandler said. "With a realignment of prices, there was the realization that there may not be a tremendous amount of profit in this market, and they need to make their decisions accordingly."
Those decisions include a noticeable delay in the licensing of power plants. Chandler said 10 plants were in the licensing process and were scheduled to go on line in 2004. Of those 10, only two look like they'll meet that schedule, she said.
For 2003, the state is supposed to have 5,500 megawatts come on line and another 1,600 megawatts for 2004. Chandler said they are concerned about a total of 1,500 megawatts being delayed, creating the potential problem in 2004.
But power providers such as Calpine Corp. claim the economy and the collapse of Enron have made the current energy market unfriendly for generator expansion.
Calpine spokeswoman Katherine Potter said they have delayed construction on 34 plants nationwide because of the severe industry downgrades of energy stocks and valuations.
"We won't enter construction until it's the appropriate time in the market," Potter said. "We've had softer power prices and mild weather, but hopefully we're starting to see a strengthening in the economy and more normal weather patterns."
The Energy Commission uses projections of the hottest summers to calculate demand levels, so the 62,150 megawatt figure assumes it will be an unusually hot year. If it's not a sweltering summer, however, shortages won't be an issue because demand will be less.
Another concern, according to Chandler, is a drought, which could affect the amount of hydroelectric power available during peak summer demands.
However, Chandler said, the current snowpack is deep enough that there is not a drought condition -- even though Southern California is well below average rainfall levels this winter.
Chandler said hydroelectric power in a wet season can fire up 8,000 megawatts while in a dry year it can sink to 3,500 watts
In the meantime, the governor's office is also seeking to extend the price caps on buying power --currently at $150 per megawatt hour -- as well as making a strong push for continued conservation efforts around the state to stave off potential shortages.
Steve Maviglio, an official with Gov. Gray Davis, said the governor also plans to hold power suppliers to the contracts they signed last summer that legally obligate them to build power plants within the next three to five years.
"If they don't, we'll sue them," he said.
And Southern California Edison, which, since deregulation, must purchase power from the suppliers, said it will begin ramping up conservation efforts in April by offering customers rebates and incentives.
Edison spokesman Steve Conroy said the company has been tracking the Energy Commission's concerns and agrees there need to be enough power plants to feed the state's supply.
"We are very well aware that a number of projects have been tabled," he said. "Of course, our concern is improving our financial health and getting back in the business of providing power for our customers."
(Contact David Montero of the Ventura County Star in California at dmontero(at)insidevc.com)
See Robert357's comments at post #20.
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