Re: Power Outages - DOE Richardson Blames Utilities Lack ofInvestment?!

[Bob Flood <bflood@SLAC.Stanford.EDU>]

>An interesting story from the Compuserve Main Page. Utilities per DOE's
>Richardson are guilty of not wanting to invest in generation capacity.

In addition to the fanatical environmental opposition that new generation
encounters, the deregulation process has changed the most fundamental
concept of power generation in America. In the monopoly scheme, a utility
has a clearly defined service area, and can identify the electrical demand
and plan for generation accordingly. Investing in building new capacity to
meet anticipated demand growth was one of the responsibilities that the
utility incurred in exchange for monopoly status, i.e., no competition for
power sales. Deregulation has abandoned this concept.

With more than one power company being able to sell power in an area, there
is no longer any one entity that can be held responsible for ensuring that
there will be enough electricity to meet all needs. Investing in new
capacity under the monopoly system carried no risk - a return on the
investment was guaranteed through inclusion in the rate base. But now that
investment is a risk. If the increased demand fails to materialize, is
smaller than your forecast, or if others also build to meet a higher demand
and, as a group, the new capacity is too much, we have (for the first time)
the opportunity to have electricity that can't be sold.

A utility that didn't build under the monopoloy system was in danger of
serious problems with its regulator, and frankly, I don't know of any such
case because a utility really couldn't lose by building more (approved)
plants. In today's market, there is a potential liability in building new
capacity.  Braving the warfare of getting a new plant approved and built
could result a financial disaster. But building nothing new can't lose you
anything.

A free market where there is demand for something will result in creation of
a corresponding supply by someone wanting to make money. However, that
supply rarely precedes the demand - and that's what's going to happen to the
electricity business. Be prepared for chronic power shortages in high use
periods because utilities aren't going to invest until the increased demand
is right in front of them.
============================
Bob Flood
Dosimetry Group Leader
Stanford Linear Accelerator Center
bflood@slac.stanford.edu


************************************************************************
The RADSAFE Frequently Asked Questions list, archives and subscription
information can be accessed at http://www.ehs.uiuc.edu/~rad/radsafe.html