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Scorching temperatures strained electric systems throughout the nation as consumption broke records, underscoring warnings by regulators and industry officials that the nation isn't building enough power plants and transmission lines.
Grid officials in the most populous states asked consumers to trim electricity use to reduce the possibility of supply disruptions. Despite conservation efforts, records for electricity consumption were set in California, Texas, New York, the mid-Atlantic region and the Midwest.
In New York, demand crested at 32,624 megawatts yesterday, about 2% higher than a record set a year ago of 32,075 megawatts, with some power losses occurring in the New York City area. In the Midwest, demand surged past the record of 131,435 megawatts by late afternoon to 132,658 megawatts and in Texas it swept past the record of 60,279 megawatts to 62,396 megawatts, enough to absorb the equivalent of four large power plants, according to the regions' grid operators. In the mid-Atlantic region, demand was 139,746 megawatts by late afternoon, shattering a record of 133,763 megawatts by 4.5%, the widest margin in any region.
In California, the grid-operating California Independent System Operator said demand of 46,561 megawatts beat a record set last July of 45,431 megawatts. Last week, the grid operator submitted a report to Congress in which it predicted the "most likely" summertime peak usage would be more than 500 megawatts less, illustrating the danger of relying on predictions.
Rising demand throughout the nation could reignite debate about how best to stimulate construction of plants in states that have deregulated their retail electricity markets, where regulators typically don't order utilities to build facilities. To encourage building plants, Texas gradually is raising its price caps for wholesale electricity. Those caps are reached periodically at times of high demand. The current cap of $1,000 a megawatt hour is expected to rise to $2,000 next March and to $3,000 by March 2009, making it the highest price ceiling in the nation.
Following a massive blackout in the Northeast and parts of the Midwest in August 2003, Congress in 2005 gave federal energy regulators more authority to intervene in cases where transmission lines are needed but aren't getting built because of disputes between states. Tight supplies this summer could prompt the Federal Energy Regulatory Commission to take a more aggressive stance and push development forward. Three new members join the five-member body this month.
FERC Chairman Joseph Kelliher last week warned a House energy subcommittee that trouble-prone areas include California, Connecticut and New York City. Although many generating plants were built in the U.S. in the late 1990s, the California energy crisis of 2000-2001 and bankruptcy of big power trader Enron Corp. in late 2001 shook up deregulated electricity markets and many projects were canceled.
Now, electricity supplies in some states are becoming uncomfortably tight at times of high demand. "This is not the time for complacency," Mr. Kelliher warned the House subcommittee, adding that electric system "vulnerability" is greatest in summer.
High energy demand this week will likely translate into big profits for some generators, especially those that use lower-cost coal or nuclear fuel to make electricity.
In California, as throughout the arid West, grid officials not only feared demand would outstrip resources but also worried high temperatures could prompt wildfires that could force major transmission lines out of service. Several fires were reported yesterday, but so far none have threatened essential transmission corridors. "That was our lucky break," said Stephanie McCorkle, spokeswoman for the California ISO in Folsom, Calif.
Unlike the East, where electric systems are tightly networked, utilities in the West more often rely on electricity that is carried long distances, making power supplies more vulnerable to disruption. The California ISO has said California needs at least $1.8 billion of additional transmission investments, mostly in the southern part of the state, the area that is the most stressed electrically. Northern California has been helped this year by hydro-electric resources that are the best in years.
Grid operators will likely be stressed again today with high temperatures expected to continue in most places. The longer a heat wave lasts, the more fragile the electric system becomes as older units succumb to mechanical breakdowns and as heavily laden power lines sag from heat, sometimes into trees, causing short-circuits or fires.
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