North American Electricity Demand Continues to Outpace Resource Growth; Reliability Concerns Remain

    California, Rocky Mountain states, New England, Texas, Southwest and
    Midwest United States; and Western Canada; are areas of concern

    PRINCETON, N.J., Oct. 16 /CNW/ -- Electricity usage in the United States
is projected to grow more than twice as fast as committed resources over the
next 10 years, the North American Electric Reliability Corporation (NERC)
announced today in its annual 2007 Long-Term Reliability Assessment. Unless
additional resources are brought into service, some areas could fall below
their target capacity margins within two or three years.  In parts of western
Canada, demand is projected to outpace resource growth within about two years.
    "We are at the stage where emergency situations are becoming more
frequent," said Rick Sergel, president and CEO of NERC.  "Though some
improvements have been made, we are requiring our aging grid to bear more and
more strain, and are operating the system at or near its limits more often
than ever before.  As operating margins decrease, we are limiting our ability
to manage unplanned events like equipment failures and extreme weather,"
Sergel said.
    Specific reliability findings, as detailed in the report, include:
    Wind, solar, and nuclear generation -- Wind and solar are increasingly
attractive generation resources, which provide benefits including fuel mix
diversification and greenhouse gas emissions reductions.  "Renewable resources
are an important part of North America's energy future, but reliably
integrating them into the bulk power system has its challenges.  Large-scale
wind and solar generation resources are often remotely located and will
require new transmission lines to deliver their power to population centers.
Furthermore, we must pin down how much power these renewables can consistently
produce during peak demand times so that they can be factored into reliability
planning," said Sergel.
    Proposed nuclear plants, because of their large size, will also require
expansion and strengthening of the grid to provide for their reliable
    Capacity margins -- Peak demand for electricity in the United States is
forecasted to increase by almost 18 percent (135,000 MW) in the next 10 years
-- enough energy to power more than 100 million homes on an average day.
Meanwhile, committed resources to meet demand, including demand response
programs, are projected to increase by only roughly 8.5 percent (77,000 MW).
Counting uncommitted resources, total resources would increase by 123,000 MW
or 12.7 percent.  California, the Rocky Mountain states, New England, Texas,
the Southwest and the Midwest could fall below their target capacity margins
within two or three years if additional supply-side and demand-side resources
are not brought into service.
    Transmission -- While several transmission projects were completed in the
past year, and a number of planned projects have been accelerated, projected
transmission additions still lag demand growth and new generation additions in
most areas.  Transmission miles are projected to increase by 8.8 percent
(14,500 circuit miles) in the United States and 4.8 percent (2,250 circuit
miles) in Canada over the next 10 years.
    While this is significantly more planned transmission than projected in
last year's assessment, financing, pricing, cost allocation, siting,
permitting, and building new transmission lines remain difficult.  "NIMBY is
becoming NIMS: Not in My State.  Reliability of the power grid in one state
affects reliability in other states too, due to the interconnected and
interdependent nature of the power grid," said Sergel.
    Aging workforce -- About 40 percent of senior electrical engineers and
shift supervisors in the electricity industry are eligible to retire in 2009,
according to a Hay Group study.  This loss of expertise, exacerbated by the
lack of new recruits entering the field, is one of the more severe challenges
facing reliability today.  Support for university R&D programs, additional
outreach, and continual partnership between industry and government are
required to address this issue.
    Natural gas reliance (United States only) -- Florida, Texas, the
Northeast, and Southern California continue to be highly dependent on natural
gas as a fuel for electricity generation.  This dependency could impact
reliability in those regions as competition for gas supply and delivery
capacity increases and Canadian imports begin to decline.  Overseas markets
can provide new supply, but require the construction of LNG terminals, and
increase the grid's exposure to global economic and political risks.  While a
number of steps have been taken to mitigate the reliability impacts of this
high gas reliance, more action is needed.
    The 2007 Long-Term Reliability Assessment analyzes the adequacy of the
North American bulk power system through 2016 and calls for actions to improve
reliability.  The report is available at: .
    The North American Electric Reliability Corporation's (NERC) mission is
to ensure the reliability of the bulk power system in North America.  To
achieve that, NERC develops and enforces reliability standards; assesses
adequacy annually via a 10-year forecast and winter and summer forecasts;
monitors the bulk power system; audits owners, operators, and users for
preparedness; and educates, trains, and certifies industry personnel.  NERC is
a self-regulatory organization, subject to oversight by the U.S. Federal
Energy Regulatory Commission and governmental authorities in Canada.  Learn
more at .

For further information:

For further information: Kelly Ziegler of North American Electric 
Reliability Corporation, +1-609-452-8060,; or Susan 
Boucher, +1-609-452-8060,, for North American Electric 
Reliability Corporation Web Site:

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