Thursday, February 16, 2012

Texas on pace for energy shortage by 2014 - FierceEnergy

"and discourage investors from backing new generation projects."

Lawmakers press regulators to explain how electricity reserves have suddenly waned
Feb. 9, 2012 - Texas' risk of running short on electricity reserves over the next two years has risen dramatically in the past six months, as about 13,000 megawatts of planned new generation projects were either canceled or suspended, regulators told state lawmakers Thursday.

That surprised at least one member of the House State Affairs Committee, Rep. Rene Oliveira, D-Brownsville, as the panel investigated whether the state's competitive electricity market can keep the lights on.

"I'm still a little stunned we couldn't anticipate it," Oliveira said. "I think what you are telling me is a 'perfect storm of events' that surprises me."

The historically hot and dry summer of 2011 exposed thinner than expected reserve margins as the Electric Reliability Council of Texas, the state's largest electricity grid that includes Central Texas, narrowly avoided rolling blackouts.

But Donna Nelson, chairwoman of the Public Utility Commission of Texas, said several factors are contributing to what could become a shortage of electricity reserves by 2014.

The price for natural gas, which is used to generate electricity, is at historically low rates. That is good for some sectors of the Texas economy but translates into lower wholesale electricity prices. Those lower prices are discouraging investments into new generation plants, Nelson testified. read more>>>

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