New England Could Face Power Crisis Like California's

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New England Could Face Power Crisis Like California's Knight Ridder/Tribune (February 7, 2001)

PROVIDENCE, R.I. _ The operator of the region's electricity grid Monday warned that New England may not have enough natural gas by the winter of 2003 to run all of the power plants it will need.

It is the first suggestion that New England could be facing a power shortage such as the one under way in California.

But the Independent System Operator (ISO) New England, which commissioned the study, said the region still has time to act.

"I don't think people should start to worry now," William W. Berry, acting chief executive and chairman of ISO New England, said in an interview. "A year from now, if we come back and say nothing has been done, then they should start to worry."

Officials for the New England gas industry and the region's utility commissioners echoed the study's concerns.

While owners of electricity-generating plants may be unable to obtain enough gas, utilities such as Providence Gas and Valley Gas and their heating customers should not have that problem, said Thomas M. Kiley, president of the New England Gas Association.

"We won't be giving up any capacity on the pipelines" to electricity-generating facilities, Kiley said.

New England in the past has had difficulty at times meeting the demand for electricity on hot summer days when air conditioning use rises. But the study commissioned by a private consultant, Levitan & Associates, says that problem could start occurring on a few cold days beginning in the winter of 2003.

If no steps are taken to resolve it, the shortage could occur for up to 60 days during the winter by 2005.

The region, which currently uses about 22,500 megawatts of electricity on a peak day, would be short about 1,700 megawatts of what it needed within two years. Within four years, it would be 3,200 megawatts short.

The region may soon have a winter power crisis because of its increased use of natural gas, which historically is in highest demand during the winter. According to figures from 1999, the latest available, only about 16 percent of New England's power plants burn natural gas, but that could increase to 45 percent by 2005, according to the study.

So far, New England has been able to avoid a power crisis such as the one in California because it has been rushing to build new generating plants to meet the rising demand for electricity. But virtually all of those power plants would consume natural gas, and this is the first time a major energy player has indicated that there is a flaw with that strategy.

Developers have proposed building plants that would produce up to 23,000 megawatts of new generation. All of the plants would burn natural gas because it creates less air pollution, which makes neighbors and environmental regulators more accepting.

So far plants producing 1,500 megawatts have been built and plants producing another 6,700 megawatts are under construction and will be operating over the next three years.

Berry said his agency, which manages the electric grid, commissioned the study last year to gauge how the demand for all of this new power was going to coincide with the capability of the region's six natural-gas pipelines.

The consumption of natural gas has increased 75 percent in the last decade in New England as households have switched from oil to gas and industrial and electric plants have increasingly relied on the fuel.

The industry has responded by building four new pipelines, all bringing gas in from Canada, while also expanding the two older pipelines that stretch to the nation's Gulf Coast.

So far the gas-industry efforts to keep up with demand have paid off, according to the ISO New England report.

"We want to reassure people that in the short-term there is adequate supply to meet both the needs of electric generation and gas supply both this winter and next year," Berry said. "But the wake-up call is that we have to look beyond that to take some steps to ensure that there will be adequate supplies in the future."

Without enough firm supplies of gas, developers would not be able to run, or in future years build, all of the power plants they want.

Without adequate electricity, ISO New England could be forced to employ "rolling blackouts" such as the ones that recently occurred in California, where specific areas lost power for up to several hours.

ISO New England and its consultant suggests two solutions:

_ Pipeline companies could increase capacity on their lines, most likely by increasing the amount of compression, or pressure. Kiley of the New England Gas Association said several pipelines have that option, including the Maritimes & Northeast Pipeline, which could double its capacity. He said that it would take about a year to obtain the permits and do the construction to accomplish that.

_ More of the newer electricity-generating plants could add a back-up fuel source, most likely oil, which could be used during peak demands. Berry of ISO New England said he believes that many of the newer plants being built obtained the necessary air-pollution permits to burn oil as a backup but for cost reasons never built the tanks and bought the oil.

In Rhode Island, three plants all built about 10 years ago _ Ocean State Power in Burrillville, Pawtucket Power in Pawtucket and Manchester Street Station in Providence _ all burn gas and have oil as a backup.

But three new and proposed plants, Tiverton Power in Tiverton, RISE in Johnston, and Indeck in North Smithfield, all use or will use only gas without any backup.

Berry said there is now a strong economic incentive to add oil as a backup if it would be used in peak demand periods when electricity prices sometimes skyrocket.

Kiley said it also makes sense financially for pipeline companies to expand to meet the rising demand for gas. While he agreed with the report's findings, Kiley said he was surprised that the report did not go further, taking into account several new proposed pipeline projects.

"We do think that it is a valuable piece of information that will help New England economically," he said. "It helps underscore the need for new pipeline capacity."

http://elp.pennnet.com/News/Display_News_Story.cfm?Section=WireNews&SubSection=HOME&NewsID=7347

Douglas Hartley, an energy planner with the Rhode Island Public Utilities Commission, said a coalition of New England utility regulators was recently briefed about the study and it is concerned and studying the problem.

-- Martin Thompson (mthom1927@aol.com), February 07, 2001


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