The North American Electric Reliability Council (NERC) warned in a report last week that U.S. demand for electricity will increase by 19% between now and 2015, while confirmed power capacity will increase by only 6%. Capacity margins are projected to drop below minimum target levels in the next two to three years in Texas, New England, the Mid-Atlantic area, the Midwest and the Rocky Mountains, with many other areas reaching minimum levels later in the 10-year period.

In Canada, projected margins are adequate except in Western Canada, where additional resources will be needed as soon as 2008, NERC noted.

In its 134-page “2006 Long-Term Reliability Assessment Report,” NERC counted 67,000 MW in the United States, versus 141,000 MW of expected demand by 2015, leaving a shortfall of about 81,000 MW. The shortfall is equal to about 160 large power plants.

All of the U.S. regions have some additional resources potentially available in the form of “uncommitted resources” that exist, are under construction or are in the planning stage, which offer the potential to meet minimum target levels, the report noted. However, “actions needed to make these resources available when required including returning ‘mothballed’ units to active service, entering into power purchase agreements for existing or new resources, upgrading transmission to provide access to resources that would not otherwise be deliverable, and developing and bringing into service projects that are in generator interconnection queues.”

The adequacy of electricity supplies depends, in part, on the reliability of fuel supply and delivery systems, not just the installed capacity of generators, according to NERC. 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 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 entire report is available for download at www.nerc.com.

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