May 19, 2009 / 4:05 AM / in 9 years

Recession to cut North American summer electric use

NEW YORK (Reuters) - Overall electric consumption this summer in North America is forecast to shrink to 2006 levels as the recession cuts industrial power use, easing pressure on utilities to keep air conditioners running this summer, the electric grid watchdog said on Tuesday.

Across North America, electric demand is forecast to slip nearly 2 percent from last year’s forecast assuming normal weather conditions, said the North American Electric Reliability Corp in its summer assessment report.

U.S. consumption, which accounts for 91 percent of the NERC total, may drop 2.2 percent to 744.3 gigawatts in July when temperatures soar and utilities’ power needs peak to meet cooling demand, according to NERC forecasts.

“The economic recession has contributed to an overall reduction in the (forecast) demand for electricity this summer, leading to higher reserve margins across North America for the season,” said Mark Lauby, NERC’s director of reliability assessments.

Princeton, New Jersey-based NERC, which monitors reliability of the power grid in the United States, Canada and a small part of Mexico, tracks the amount of surplus electric supply available above a region’s summer peak, when demand can strain supply, leading to the possibility of blackouts.

NERC said capacity reserve margins, which have been shrinking in recent years, will exceed target levels this summer in every region. Summer peak reserve margins are expected to be 4.7 percentage points higher in 2009 than a year ago, due to lower expected demand and a 2.3 percent increase in generation, NERC said.

While annual U.S. electric consumption has grown at a nearly interrupted pace in the past 25 years according to government data, NERC said fluctuations in industrial use is not uncommon.

A few areas, including New England, parts of the U.S. Northwest, the central U.S., Virginia and the Carolinas, expect summer power use to match or slightly exceed last summer’s consumption, NERC said.

The highest capacity reserve margins were reported in the Northwest, the Louisiana-Arkansas area, New York and Pennslyvania-New Jersey and Maryland.

The leanest margins were reported in California, Texas and parts of the Midwest and Central Plains states, NERC said.

Supplies of fuel to generate power are at above-average levels heading into summer, the agency said. Utilities have about 52 days of supply of U.S. eastern coal on hand, exceeding the five-year high, while the supply of Powder River Basin coal is at 69 days.

The supply of natural gas is also ample, NERC said, with working gas in storage at 1.65 billion cubic feet, compared with a 1.7 bcf historic high.

Generation from wind farms has grown 45 percent from last summer to nearly 30,000 megawatts, a jump that may increase transmission congestion this summer, NERC said.

Demand-response programs, used to reduce peak electric consumption, are projected to increase by 8 percent, or 2,200 MW from last year, the report said.

Reporting by Eileen O'Grady; Editing by Marguerita Choy

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