State utilities see no power shortage ahead Source: The Milwaukee Journal Sentinel Publication date: 2000-05-28

State utilities see no power shortage ahead Electricity reserves offer cushion against higher demand during summer

By LEE HAWKINS JR.

of the Journal Sentinel staff

Sunday, May 28, 2000

Wisconsin's electric utilities expect no problems meeting demand this summer with new generation padding power reserves.

The state's electricity reserve margin is 19.6% -- above the minimum level of 18% set by state regulators, which should help keep power flowing, regulators said.

"We are very encouraged," said Jeff Butson, a spokesman for the state Public Service Commission. "It's much better than it was last year."

But that optimism could melt quickly if any of the state's key power plants are knocked off line or if utilities in other regions can't meet demand, experts and the utilities acknowledge.

The longest economic boom in the nation's history has driven up demand for electricity across the country and sliced the margin for error. Reserves are thinner than ever: The United States will consume 700,000 megawatts of power on an average summer day. Generating plants, meantime, can crank out 780,000 megawatts of electricity a day, according to the U.S. Department of Energy.

The result is that regional power grids are vulnerable to unexpected pressures, such as equipment breakdowns and transmission constraints, that can make it hard to deliver power efficiently to areas where it is needed most.

The interdependent structure of regional power grids requires that utilities that aren't experiencing problems help those that are.

"A major unit down in Wisconsin or a nearby state can and probably will have an impact," said David Parker, an analyst with Milwaukee- based Robert W. Baird & Co. "If it stays dry and hot in the U.S. like last year, it could be touch-and-go in some states, but I think that Wisconsin will be all right."

Wisconsin Electric Power Co. also is optimistic. "We believe our customers should feel confident that our company will be prepared to provide reliable energy to them throughout the summer months," said John Bartel, a spokesman for the company.

"We remain in very close contact with the other utilities in the state, and we are aware that they are going to be in good shape, if not better shape, than they were last year."

Contrast with Past Summers

The scenario painted by utilities and regulators at the start of this summer contrasts sharply with previous summers, when tight electric supplies forced some Wisconsin utilities to ask customers to conserve power and to reduce power to companies enrolled in voluntary cutback programs.

In 1997, sweltering heat combined with a dearth of operating plants to force Wisconsin utilities to scour the nation's power market to supply the state. Transmission lines into the state were overburdened. Utilities cut service to air conditioners and electric water heaters of customers enrolled in programs in which they agree to have their service interrupted in exchange for credits on their bills.

This summer, Wisconsin utilities expect to have about 720 more megawatts available than last year as the result of rigorous planning, which included contracting for power from new sources and, in some cases, bringing in portable generators.

"I'm guardedly optimistic," said Charlie Severance, director of bulk power for Wisconsin Public Service Corp., in Green Bay. "There have been a number of improvements, so our utility is in better shape than last summer."

While the biggest project has not yet begun -- a major transmission line from Minnesota across northwest Wisconsin -- small projects have helped to build reserves in the state. The $250 million power line project from Wausau to Duluth would give Wisconsin access to surplus electricity from sources in Manitoba and the Dakotas.

Wisconsin's major utilities belong to the Midwest Interconnected Network, one of 10 reliability councils composing the North American Reliability Council, which oversees the nation's power grid.

The Midwest network, which oversees regional generation and transmission facilities, requires that utilities that have power reserves ship power to other companies in the 120,000-square-mile region if they need it.

Other Regions Struggling

While energy reserves in the Midwest network seem sufficient, utilities in other regions are struggling to achieve such levels of comfort.

The nearby East Central Reliability Region -- made up of utilities in Ohio, Michigan, Indiana and West Virginia -- has a reserve capacity margin of only 11.2%. That figure rises to 14.3% if all of its interruptible customers and energy conservation programs are included, but it's still considered thin.

In a recent report, the East Central region said that based on normal weather conditions there is a 55% chance that utilities in the region "will need to rely on supplemental capacity resources, such as additional imports of power from outside the region."

Wisconsin utilities concede that utilities in the East Central region -- known by the acronym ECAR -- may run short of power.

"We are concerned about (the ECAR) region, because their reserve is quite low," Severance said. "It will affect us."

Bartel, of Wisconsin Electric, agreed.

"Serving Wisconsin Electric's customers is our top priority, but once that is satisfied, we are obligated to help neighboring utilities when they encounter emergency conditions," he said.

"If there is an emergency elsewhere, we may need to make public appeals and operate our load management programs."

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-- Martin Thompson (mthom1927@aol.com), May 29, 2000