From DBS:
California has added very little generating capacity in the past decade. At
the same time, demand in California surged as the state's economy
recovered from a recession and technology growth in Silicon Valley
spurred power demands.
California now imports 25 percent of its power and when electricity
shortages develop, as they did this week, the potential for blackouts
becomes severe. See Power Emergency story.
On the contrary, in Texas the 1995 wholesale deregulation bill has served
to stimulate power plant construction, according to Tom Baker, president
of TXU Electric and Gas, Texas' largest utility, and a subsidiary of TXU
Corp (TXU: news, msgs).
"It's been difficult to site and locate plants in California, so there hasn't
been any significant capacity added in the last 10 years," Baker said.
Between 1990 and 1997, about 1,000 megawatts of new power came
online in California, said Suzanne Garfield, a spokesperson for the
California Energy Commission. That's enough to serve about a million
residential customers.
In Texas, the state has added more than five times as much generating
capacity as California just since 1995. And construction of nearly 14,000
megawatts of capacity has begun, according to the state Public Utility
Commission.
That's twice as much as California is considering adding.
"The lack of supply in California goes back to before deregulation was
even discussed," said Baker who added that the California energy crisis is
the result of a lack of supply combined with atypical cold winters and hot
summers, which have sent demand for power soaring. "Unfortunately, you
can't build a power plant in a few days, and there hasn't been any
incentive to build them," he said.
When all is said and done, Texas will have reserves of about 25 percent.
Baker, who's been in the energy business since TXU was called Dallas
Power & Light, characterized the figure as more than sufficient. In the old
days, he said, 15 percent reserves would have been deemed adequate.
Industry players and observers say that one reason that Texas is a
friendlier place in which to do business is that it takes two-and-a-half to
three years to bring a plant online versus California, which takes an
average of seven years.
"Texas has done a good job of developing a streamlined system for
permitting," said Chuck Griffin, a spokesman for Atlanta-based Southern
Energy (SOE: news, msgs), which has or is completing projects in Texas.
Griffin noted that Southern Energy owns plants in California and plans to
expand two.
"There are hurdles in Texas, but everything new that's being built there are
gas-based combustion turbine systems, which is a very clean system.
Texas has a good understanding of that, so there aren't a lot of
environmental issues." |
