Washington (Platts)--18Jun2007

Balancing likely US limits on carbon emissions with the need to meet
growing demand for electricity is the major challenge facing the US electric
utility sector, industry executives said in a new survey.

     The poll, conducted by Washington-based consulting firm GF Energy, found
that more than 90% of US utility CEOs believe that a global policy to tackle
climate change will be in effect before 2015, while 43% of those surveyed
believe that such a regime will be in place as early as 2009.

     About 70% of the utility executives surveyed also said they believe new 
generating capacity required to meet regional demand must be built before
2011.   

     As a result, the survey found that the power industry's emerging
challenge will be to reconcile growth in demand with reducing carbon
emissions. "It looks to us that critical infrastructure investment decisions
may have to be made before all the contours of climate policy have been
determined," said GF Energy CEO Roger Gale.

     Most industry executives also expect that rate increases will be required
to cover the industry's costs of coping with a climate-change mandate and
building generation, according to the survey. 

     In addition, the survey found that most utility executives believe
climate-change policy will boost investment in nuclear power and advanced
coal-fired power plants with carbon capture, but utility CEO's also reported
that they expect more natural gas-fired power plants will be built as a quick
alternative to keep pace with any climate change mandates. 

     Greater commitment to energy efficiency will also be part of the response
to a climate policy but the industry continues to plan for large baseload
power plants, Gale said.

		--Cathy Cash, cathy_cash@platts.com