A future electric power glut... ?
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Rush to Build Plants May Cause Oversupply
Utility Business, Jun 1, 2001
United States power companies have plans to build $140 billion in new generation to avoid California's high-cost, short supply power woes, according to Electric Power Research Institute. The group says that “developers could overshoot the requirements of several market regions, creating a dip in prices, profitability and utilization rates.”
The generating capacity among the top 10 developers totals 136,580 megawatts or about 45 percent of new capacity expected to be running by 2007, according to EPRI. If plans for new plants and upgrades proceed, it could mean as much as 305,000 megawatts of power by 2007.
The frenzied pace of construction plans are fueled by the severity of the California power crunch. California has environmental rules that prevented building new generation for more than 10 years.
California-based Calpine Corp. is one of the 10 independent power producers looking to add new plants in California. The company has 32,600 megawatts of base load capacity and 7,200 megawatts of peaking capacity in operation, under construction, pending acquisitions and in announced development in 29 states and Canada. The company wants 70,000 megawatts in operation by the end of 2005.
Some of the other companies looking to build generation in California are Georgia-based Mirant, California-based Pacific Gas and Electric's National Energy Group, Reliant Energy, NRG Energy, Public Service Electric & Gas holding company PSEG, Florida Power and Light holding company FPL Group and North Carolina-based Cogentrix.
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