Tight Electricity Supply Situation in Southland This Summer

By CMTA Staff

Capitol Update, June 3, 2005 Share this on FacebookTweet thisEmail this to a friend

State and federal energy officials are predicting a tight electricity supply situation in Southern California this summer if the weather is unusually hot.  They say the situation could be worse in the summer of 2006.

Southern California faces "the worst electricity supply situation in the entire country," according to Joseph Kelliher, a member of the Federal Energy Regulatory Commission. 

The state’s electricity demand grew 4 percent last year, with the largest percentage of growth in valley areas that are hot in the summer and require significant air conditioning.

Meanwhile, supply has not been keeping up with demand.  Since the 2000-2001 electricity crisis, most of the new power plants slated for construction have been postponed or canceled due to a combination of factors: low wholesale electricity prices, the Enron and related scandals, regulatory uncertainty and reluctance by Wall Street to finance new electricity generation projects.  According to the California Energy Commission’s (CEC) Integrated Energy Policy Report, if a number of older power plants retire and additional resources don’t come on line before 2008, electricity reserve margins could become dangerously thin.

While the state has avoided blackouts since the crisis, the potential for outages in the next few years looms on the horizon.

In light of the various warnings issued by federal and state officials and other industry experts, CMTA supports the California Public Utilities Commission’s efforts to ensure resource adequacy and an adequate reserve margin as well as granting authority to the utilities to engage in forward contracting through a competitive procurement process (as provided in AB 57 (Roderick Wright, D-So. Ctrl. Los Angeles, signed into law in 2002, Ch. 835). The CPUC is presently implementing AB 57, with several resource adequacy and procurement proceedings underway.

The state’s economy, and the energy-intensive manufacturing sector in particular, need abundant and affordable power in order to be strong and healthy in the future.

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