Reliability Projections a Mixed Bag

Transmission constraints, rather than generation capacity, are seen as the major hindrance to reliable electricity supplies through this decade, according to the most recent Reliability Assessment, published late last year by the North American Electric Reliability Council (NERC), Princeton, N.J. Generating facilities now in the planning stages are expected to create a 20% margin between demand and capacity, according to the report. However, difficulties in getting new transmission lines approved and built, as well as complications arising from deregulation, could create problems in delivering that electricity to customers.

Independent power producers have responded to the opportunities deregulation created by investing in new generating plants. These "merchant" power plants are a big contributor to the anticipated generating-capacity margin. However, because the construction of these plants is driven by local market conditions, rather than by the more centralized planning common when electricity sales were more regulated, there could be regional generation-capacity difficulties, argue the assessment's authors.

The larger problem, though, is the possibility of overtaxing existing transmission capacity. Planners are facing increasing difficulty in getting new transmission lines approved. In the past, as utilities built new generating plants, they also added to their transmission capacity. Under deregulation, utilities have had to separate their generating and transmission assets. New regional transmission organizations (RTOs), created last July by the Federal Energy Regulatory Commission, are seen as an alternative transmission-planning mechanism. However, the assessment notes, this arrangement leaves a number of questions unanswered, including how accountable RTO officials will be to local governments if transmission problems arise.

Additionally, the rise in merchant plants means a larger number of suppliers are adding electricity to the grid, at their own independent schedules. The difficulty in coordinating that supply was one of the causes behind power problems experienced on the East Coast in the summer of 2000, the report says.

From Pure Power, Summer 2002.