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All regions of the United States have adequate electric capacity reserves to meet demand forecasts “essentially unchanged” from last summer, according to Federal Energy Regulatory Commission staff.

All regions of the country will have electricity adequate to meet forecasted summer demands, FERC staff reports. (Photo By: Lee Celano)

The staff offered its perspective in a recent briefing on the Summer 2011 Energy Market and Reliability Assessment.

Basing its conclusions on the North American Electric Reliability Corporaton’s recent summer assessment, FERC staff told the commission the country’s total weather-adjusted load for the coming summer will be less than 1 percent greater than last year’s levels. Capacity available on-peak is projected to rise by 3 percent.

Turning to some of the elements of that capacity, the report indicated the following:

• Hydro will be bolstered by high snowpack levels in the Pacific Northwest and California, and little affected by drought conditions in Texas and the Southwest.

• Installed nameplate wind capacity has risen by about 7.8 percent from 2010, to about 37 gigawatts. Nationwide, this summer’s on-peak capacity is forecast to be 13.2 percent of nameplate.

• Demand-side management resources available to reduce peak loads have risen by about 13 percent since last summer, to about 34 GW.

Staff forecast wide regional variation in forward price differentials. Compared with last year, 2011 prices are higher in the East and lower in the West. This is due to eastern power prices mirroring the rise in natural gas prices, which are up 17 percent from last year, staff reported.

Meanwhile, in the West, hydro generation—“the single most important factor in influencing power supplies and price”—is expected to place downward pressure on prices.

Finally, staff reported on a number of infrastructure and market changes that could impact energy markets this summer. On the electric side, a new project, the Trans Allegheny Interstate Line, is due to come on-line by June 1 and will help alleviate congestion between the western and eastern parts of PJM.

The report also noted that the realignment of part of an IOU’s operations will move the border between MISO and PJM where flows are coordinated between the two RTOs.

“We will be watching for impacts on congestion costs and effects on prices in the west-to-east corridor,” FERC staff said.

Tags: Federal Energy Regulatory Commission, Trends Reports and Analyses