Electricity Supply: Surplus or Shortage?

Report Outline
A Troubled Industry
Shortage Debated
Alternative Solutions
Special Focus

A Troubled Industry

Shortage Fears Highlighted at Hearings

The specter of regional electric power shortages by the early 1990s loomed large at Senate hearings in late July. At the hearings, entitled “When Will the Lights Go Out?” representatives of private, investor-owned electric companies, economic analysts and government officials warned that the current surpluses of electric generating capacity could be used up within the next decade. “Without new generating capacity, the lights …will start to go out sometime in the 1990s and will do so increasingly as the decade progresses,” Deputy Secretary of Energy Danny Boggs said.

Given the current national surplus, the idea of widespread electricity shortages seems far-fetched. “Reserve” margins in every region of the country top the 20 percent figure traditionally thought necessary to ensure reliable electric service; in most regions the margin is well above 20 percent. Blackouts and brownouts are rare, localized and usually result from mechanical failures rather than lack of generating capacity.

Electric utility leaders claim the surplus will not last. Demand for electricity is expected to increase, though predictions of the rate of growth vary widely. At the same time, aging power plants will be retired, and oil- and gas-fired plants could become too costly to operate if fuel prices increase.