Feb 10 - Knight Ridder/Tribune Business News - Dan Piller Fort Worth Star-Telegram, Texas

Texas and parts of the rest of the United States face blackout-causing power shortages before the end of the decade if more electricity-generating plants are not built, an energy consulting group said Thursday.

"When you consider the five- to seven-year lead time for new electricity generators, then you can see there is little time to waste on debates," said Larry Makovich, electricity policy director for Cambridge Energy Research Associates, which held its annual worldwide conference this week in Houston.

Makovich said that across the country the reserve margin -- the amount of generating power available above normal loads -- last year dropped to 23 percent from 32 percent. In Texas, the reserve margin is even narrower, at 14 percent, according to the Electric Reliability Council of Texas, which operates most of the state's electricity grid. Texas' loss of reserve margin is blamed on growing residential and commercial usage and on the retirement of many older, less efficient and pollution-prone plants.

The narrowed reserve margins, plus the heavy dependence on natural gas as a fuel for generators, has made electricity more expensive in Texas and has cost the state its traditional status as a low-cost electricity provider.

Texas has an average daily grid capacity of 60,000 megawatts, according to ERCOT figures. On a moderate weather day like Thursday, the grid uses only about half of that capacity. But during peak summer periods with air conditioners running full throttle, the load approaches the full 60,000 megawatts. The record set in August was more than 61,000 megawatts.

Alex Urquhart, president of GE Energy Financial Services, identified Texas and California as states that face possible shortages as soon as 2009 "because of internal growth and retirements of older generating plants."

Some areas face shortages much sooner. The Cambridge study identified Virginia and the Carolinas as vulnerable to blackouts as early as next year. California, which learned painful lessons from generating shortages in 2000-01, will face shortages again as early as 2008, and New York a year later, according to the study.

 

Dan Piller (817) 390-7719 danpil@star-telegram.com

Group says state may face power shortage by 2009