Brownout

What happens when you don't build more power plants? Get ready for spiking electricity rates, brownouts and even blackouts as demand soars

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If you think runaway oil prices are upsetting, just wait for what's in store for electricity. Similar forces are in play. Demand is rising fast; supply is not. The cost to get coal and natural gas out of the ground is going up, and to that expense must be added the cost of the carbon permits that Congress and the presidential candidates are contemplating. Environmentalists are getting power plants scotched. China is sucking up energy. Leave such dynamics in play long enough, and price spikes in electricity follow. But that's just the beginning. We may be facing brownouts (voltage reductions) and even rolling blackouts.
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By as early as next year our demand for electricity will exceed reliable supply in New England, Texas and the West and, by 2011, in New York and the mid-Atlantic region. A failure of a power plant, or a summer-afternoon surge in the load, could make for a blackout or brownout. "There really isn't any excess in the system," says Rick P. Sergel, chief executive at the North American Electric Reliability Corporation (NERC).
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Price shocks are already occurring. In May, long before peak summer demand, the wholesale price of juice jumped twofold in Texas, to $4 per kilowatt-hour, 25 times the average retail rate in the country. Prices exceeded the allowed rate of $2 for seven days and threatened the viability of power resellers who contracted to deliver cheap rates to consumers. New Yorkers may suffer a summer of price discontent if regulators are right about peak wholesale prices jumping by up to 90%.
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In the past few years, in dozens of utility regions such as Georgia, Louisiana and Ohio, price hikes have ranged from 20% to 80%. Overall, the cost of electricity, which declined (in real dollar terms) for the last two decades of the 20th century, has been relentlessly tracking up since 2001.
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While oil gets the attention, America uses just 15% more of it today than when the first modern energy crisis hit in October 1973. But electricity use is up 115% since then, thanks to all those plasma screens, iPhones, computers and data centers. And all economic forecasts see substantial growth in demand for electricity--think just of the coming electric cars--yet lots of problems in meeting it.
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Right now the nation has 760 gigawatts of power plants to meet current consumption, with another 154 in reserve capacity to maintain grid reliability. But in fact only 10 gigs is truly excess capacity. The other 144 is utterly essential to keep lights on when unexpected demand arises from heat waves, outages or maintenance downtime. That reserve will begin to shrink quickly. NERC estimates that over the next decade 135 gigawatts of new capacity will be needed to meet the growth in consumption. But right now plants producing a total of 57 gigawatts are planned.