The North American Electric Reliability Council (NERC) on Friday said that generating resources will be adequate to meet electricity demands throughout North America this winter, even though peak demand in North America for this winter is projected to be 9.2% higher than last winter.

NERC noted that “significant amounts” of new generating resources have been added in several regions since last winter and that generating capacity margins are greater than those projected for last winter in most NERC regions. Recently announced generation plant cancellations will not have an impact on the electricity supply this winter, NERC said in its 2002/2003 Winter Assessment report.

“In spite of this favorable outlook, there is always the chance that unanticipated equipment problems and high demands caused by extreme weather could combine to create supply problems,” NERC warned.

With respect to the expectation that peak demand will be 9.2% higher than last winter, NERC said that most of this increase is tied to moderate temperatures experienced during the winter of 2001/2002. Demand projections are based upon weather-normalized data, while actual demands include weather impacts. While peak demand is projected to be higher than last winter in most areas, there are a few areas where demand is expected to decrease.

In the Pacific Northwest, large demand reductions occurred in the direct service industry — primarily aluminum smelters — in 2000 and 2001 due to a number of factors including large increases in electricity rates and economic slowdown, according to the report. Electricity consumption in this part of the country is projected to remain relatively unchanged through the upcoming winter.

As for transmission adequacy, NERC said that transmission systems in North America are expected to perform reliably this winter. “However, operating experience shows that market conditions can, at times, cause unusual and unpredictable flow patterns that cannot be reliably accommodated by the transmission system.”

NERC also said that fuel supplies, inventories and deliveries are expected to be adequate this winter. “Recent fluctuations in wholesale gas prices may result in variations in generation dispatch patterns that will change transmission loading patterns.”

In Ontario, NERC said that resources are expected to be tight but adequate during the upcoming winter period. This assessment is based on the assumption that 510 MW of new merchant capacity will be placed in service during the period and that several other generating units will be returned from maintenance outages as planned.

“Delays in commissioning new units or returning generators to service, whether from long-term outage or maintenance outages, as well as higher demand levels under extreme weather conditions, could lead to extensive reliance on imports this winter,” NERC said. “The IMO [Ontario independent electricity market operator] believes that its transmission import capability and the capacity available for import from neighboring regions will be adequate to supply these requirements if necessary.”

NERC said that energy supplies within Ontario are expected to be adequate overall, but shorter-term energy deficiencies could arise as a result of higher-than-forecast forced outage situations, extreme demands and other influencing factors.

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