October 17, 2006

Austin American-Statesman
Texas Risking a Power Gap

FROM STAFF AND WIRE REPORTS

Texas is among the U.S. regions most likely to face power grid problems and further blackouts in the next few years, the head of the North American Electric Reliability Council said Monday. Rick Sergel, president and CEO of the electric council, said both Texas and New England "have had numerous incidents in the past few years of having to call on customers to reduce demand."

Sergel noted that many parts of the country are in danger of not having enough power to meet the demand for electricity.

A new council report said demand for electricity is expected to grow over 10 years by 19 percent in the U.S., but power capacity will increase only by 6 percent.

"We have work to do," Sergel said.

The council is an industry-funded group that is supervised by the Federal Energy Regulatory Commission and authorized by Congress to oversee mandatory standards for operating the U.S. bulk power system.

The report said the margins of safety in electricity supply are projected to drop below minimum target levels in Texas, New England, the Mid-Atlantic, the Midwest and the Rocky Mountain area in the next few years.

Texas and New England stand out as being most at risk for power grid failures if significant changes aren't made, Sergel said.

The report focused on the area covered by the Electric Reliability Council of Texas, which manages the transmission grid in 75 percent of the state.

Electric customers across the state suffered rolling blackouts in April, when temperatures hit 100 degrees while several generating plants were out of commission for repairs. Monday's report said forecasts of employment growth in Texas could strain the power grid.

For example, in ERCOT, available capacity margins - the amount by which available supply exceeds peak demand - will drop below the 11 percent minimum target level by 2008.

A 15 percent margin generally is viewed as necessary to ensure reliable power, said Stan Johnson, manager of situation awareness for the national council.

Mothballed power plants in Texas could be brought back online to meet demand shortages in the event of an emergency, according to the report.

The situation in Texas looks brighter if power plant and transmission line construction proceeds as planned, the report said.

Power companies such as TXU Corp. plan to build a number of coal-fired facilities, and transmission line companies plan to add nearly 2,000 miles of power lines by 2010. The ERCOT grid currently has 38,000 miles of transmission lines.

If the buildout continues as planned, always a big "if" because of regulatory hurdles, ERCOT could stay above the 11 percent threshold until 2013, the report said.

ERCOT has "major transmission constraints," including limitations on its ability to move power into Houston and Dallas during demand emergencies. The report also cited a lack of transmission capacity from West Texas, where wind power is generated, and in the Rio Grande Valley.

The report also notes that the natural gas supply into ERCOT could be reduced this winter. About 60 percent of power generation in ERCOT is fueled by natural gas, according to the report.