NERC Issues Worrisome Assessment

Issue 11 and Volume 110.

Unless change comes quickly, North America’s electric system may soon decline, according to an assessment from the North American Electric Reliability Council (NERC). The warning comes in NERC’s first report since being designated as the official U.S. electric reliability organization (ERO). NERC is currently working to gain ERO recognition in various jurisdictions in Canada.

NERC’s 2006 Long-Term Reliability Assessment Report analyzes the adequacy of electricity supply and transmission reliability in North America through 2015 and calls for actions to improve bulk power system reliability. It expects U.S. electricity demand to grow almost 20 percent over the next 10 years, while confirmed power capacity will grow by 6 percent.

Capacity margins are projected to drop below minimum target levels in Texas, New England, the Mid-Atlantic area, the Midwest and the Rocky Mountain area in the next two to three years. Other portions of the Northeast, Southwest, and Western U.S. are seen falling below minimum target levels a few years after that. In Canada, projected margins are adequate except in Western Canada, where additional resources will be needed as soon as 2008.

North America’s transmission system also needs additional investment to address reliability issues and economic impacts, according to Rick Sergel, NERC president and CEO. He said transmission system expansion and strengthening continues to lag demand growth and generating resource expansion in most areas. Total transmission miles are projected to increase by less than 7 percent in the United States and by 3.5 percent in Canada through 2015.

Sergel said the adequacy of electricity supplies depends in part on the reliability of fuel supply and delivery systems, not just the installed capacity of generators. Gas-fired generating capacity additions are projected to account for almost half of the resource additions over the 2006-2015 period, with coal accounting for the other half. Strengthening the coal and gas delivery infrastructures and firming up gas supply and delivery contracts will reduce the potential for shortages in electricity due to fuel disruptions.

The NERC report identifies 22 necessary actions that encompass all areas of the bulk power system including generation, transmission, fuel supply and delivery, and demand response. Specific recommended actions include:

  • Additional power generation facilities
  • New and upgraded transmission facilities
  • Stronger contracts and other arrangements for reliable fuel supply and delivery
  • More demand-side measures such as business and consumer energy efficiency programs
  • Addressing the aging workforce issue
– Steve Blankinship