A report by the California Energy Commission (CEC) has warned that rising demand in the state could lead to higher rates during hot summer months and possible blackouts unless new capacity is built. Demand in California has twice outstripped supply this summer when temperatures, and air-conditioning consumption, soared.
The report analyses the situation that might develop if aging gas-fired and nuclear power plants are shut down and no new plants are built to replace them. Under worst case conditions, the CEC concludes, shortages could begin as early as next year.
If this situation was reproduced, big commercial users could find themselves paying higher prices as soon as shortages began. Price changes for residential and small commercial users would come later because their tariffs are frozen until 2002 under the state’s deregulation plan.
The commission is considering four applications to construct gas-fired power plants that would together generate 2700 MWe, 6 per cent of peak demand. Plans for a further seven plants with a combined capacity of around 2800 MWe have been announced by developers but their applications have yet to be submitted to the CEC.