Where the Lights May Go Out This Summer

The outlook for the country's electrical grid this summer is generally positive, though weaker points in the country's infrastructure do exist in places like Southern California and drought-affected areas of the Southeast. Those two spots are getting extra attention from grid watchers, according to an annual assessment announced today by the North American Electric Reliability Corporation, the power industry's self-regulatory body.

"This drought really caused some concerns about plant operability, as water levels threatened to drop below plant cooling and water intakes," says Mark Lauby, manager of reliability assessments for NERC. "Conditions for 2008, though, are improving, but we'll continue to monitor the situation."

Southern California remains a source of concern, despite improvements in infrastructure. "Significant amounts of imported power are required to fortify capacity margins and preserve reliability, resulting in heavily loaded transmission lines in the area during peak conditions," Lauby says. As a result, the report found "major unplanned transmission or generation outages or extreme temperatures or demand might lead to resource constraints."

As usual, weather is the great unknown—hot spells when consumers turn up their air conditioners and when reservoirs near power plants fall. There is also the ever-present threat of hurricanes.

Last year, NERC forecast possible supply trouble spots in Connecticut and Southern California, but it was windstorms in St. Louis that caused the most difficulty. More than 50,000 people lost power there in May. Nationwide, the unseasonably hot summer weather in 2007 drove overall peak usage 2 percent higher than the organization had predicted. The projected summer peak for 2008 is 1.3 percent higher than the actual summer peak from last year.

Fuel supplies are also being watched closely. At the beginning of this year, coal inventories at power stations were nearly at five-year highs, with more than 51 days of reserve. But eastern U.S. coal markets have been disrupted by events in the world markets, which has driven up prices to record levels. Exports of eastern American coal, for instance, are expected to jump 20 million to 30 million tons over 2007 levels. In the first two months of the year, reserves fell to 48 days.

Tightening coal supplies are a source of concern for power generation, especially if plants failed to lock in purchases of their coal supplies early when prices were low. Outages are not expected as a result, the report found, but the situation does deserve close monitoring.

And while peak capacity varies greatly depending on the region of the country (from 8.7 to 27.8 percent), wind power is also now an important source of generation. "We are starting to see an increase in wind resources impacting capacity," NERC reported.