How bad is the crisis?
Very bad. Experts say it is not a question of if we will have
blackouts, but simply when. In fact several major outages have
already occurred in the West, and the Eastern half of the country
has been on the verge of collapse several times.
|So-called demand side management programs report annual reductions
in peak demand of 10,000 megawatts or so each year. But that does
not mean peak demand is going down, although that is how the newspaper
reports often read. These are reductions from what would otherwise
have occurred, or so it is claimed. The truth is that demand continues
to grow rapidly, averaging about 3% per year, and there is no
reason why it should stop growing as the country grows.
Why is it happening?
There are three basic reasons for the crisis. First and foremost
is the huge glut in generating capacity built in the 1970s after
the last big blackout. (See the Capacity Chart) With all this excess capacity we started taking reliable electricity
for granted, and we still do. Second has been our ever-growing
environmental concerns, which make it difficult and expensive
to build new power plants. Third, in 1992 we began to deregulate
the electric power industry to allow competition between generating
companies. In the uncertainty and confusion of deregulation few
companies have wanted to take the risk of building expensive new
power plants that might not be competitive.
See Electric Power Trends 1996-1997, Cambridge Energy Research Associates, for more detail.
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