Electric Power Supply OK Through 2007,                     But Parts Of Grid Near Limit: NERC

North America will likely have sufficient generating capacity to meet demand through 2007, if proposed capacity additions are built, the North American Electric Reliability Council said in its 2003-2012 Reliability Assessment.

The report projected that total electricity demand in the U.S. and Canada will increase by 67,000 MW from 2003 through 2007, well below the 89,000 MW of new generating capacity that is expected to be added over the same period.

While the council said the outlook for 2008 through 2012 is more uncertain, it said that if current trends continued, there should be sufficient capacity to meet expected long-term demand.

The report also said the transmission system is expected to perform reliably over the near term, but warned that as customer demand increases and transmission systems experience increased power transfers, "portions" of the grid "are reaching their reliability limits." NERC further cautioned that some parts of the grid will not be able "to transmit the output of all new generating units to their targeted markets. Some well-known transmission constraints are recurring, while new constraints are appearing as electricity flow patterns change." Transmission problems, the report added, can be avoided if transmission limits "are adhered to and operating procedures are implemented as required."

"In cases where generation redispatch options have been exhausted or are ineffective, the only way to remove these constraints is to build new generation close to the demand center...or increase the capability of the transmission system." NERC said more than 7,400 miles of new transmission lines (230 kV and above) are proposed to be added through 2007, with a total of 11,600 miles added over the 2003-2012 period covered by the study. The study said that most of the reliability regions in the U.S. and Canada do not anticipate any fuel problems over the study period.

The report, which examined transmission and generation reliability in each of NERC's 10 regional reliability councils, cited, among other things, "growing concern" within the Electric Reliability Council of Texas over the future adequacy of natural gas supplies. More than 60% of existing and projected generating capacity in ERCOT is fueled solely by natural gas and officials are hoping to avoid a repeat of the widespread gas curtailments to generators that occurred last February, when the region experience colder-than-normal weather. ERCOT officials, the study said, are considering offering economic incentive for generators that can switch fuels.

The Mid-America Interconnected Network said although it expects its transmission system to perform adequately over the report period, delays in the completion of the Arrowhead-Weston 345-kV reinforcement project could impact future reliability. The Western Electricity Coordinating Council said it expects to be able to reliably meet demand through the study period, but warned that California may experience generation shortfalls by 2007 because of the decrease in new generating projects. In fact, the entire West, the report added, has seen a "dramatic reduction" in the amount of new generation proposed to be constructed and placed in operation from that reported in last year's reliability assessment.