---------------------- Forwarded by Charles Yeung/HOU/ECT on 05/15/2001 09:08 
AM ---------------------------


"Julie Morgan" <Julie.Morgan@nerc.net> on 05/15/2001 08:13:47 AM
To: "Gene Gorzelnik" <efg@nerc.com>
cc:  
Subject: NERC Releases its 2001 Summer Reliability Assessment


Ladies and Gentlemen:

For Immediate Release:

The North American Electric Reliability Council (NERC) released its 2001
Summer Assessment today.  "The assessment concludes that California will
experience difficulties meeting its projected electricity demand this
summer," said Michehl R. Gent, NERC President and CEO, "and California
electricity users will experience rotating blackouts, much more so than
last summer or this winter."  The report also states that extreme
drought conditions throughout the Pacific Northwest will affect the
available output of hydroelectric resources.  "We expect that utilities
in the Pacific Northwest will be able to serve all of their firm demands
this summer," he added, "but they will not have electricity available to
export to California and elsewhere."

For your convenience, a copy of the press release announcing the 2001
Summer Assessment is shown below. In addition, this press release as
well as the subject reports are available from the NERC web site
www.nerc.com.

If you have any questions, let me know.

Sincerely,

Julie Morgan

=========================
Contacts: Ellen P. Vancko
evancko@nerc.com or
Eugene F. Gorzelnik
efg@nerc.com

May 15, 2001

NERC Releases its 2001 Summer Reliability Assessment

The North American Electric Reliability Council (NERC) released its 2001
Summer Assessment today.  "The assessment concludes that California will
experience difficulties meeting its projected electricity demand this
summer," said Michehl R. Gent, NERC President and CEO, "and California
electricity users will experience rotating blackouts, much more so than
last summer or this winter."  The report also states that extreme
drought conditions throughout the Pacific Northwest will affect the
available output of hydroelectric resources.  "We expect that utilities
in the Pacific Northwest will be able to serve all of their firm demands
this summer," he added, "but they will not have electricity available to
export to California and elsewhere."

In addition, the report cautions that New England, New York City, and
Texas should be closely watched, despite having adequate resources to
meet demand.  New England and New York City are particularly sensitive
to long-term heat waves and higher-than-expected generating unit forced
outages.  Texas will undergo a major shift in its operation in June when
it opens up to full retail access and consolidates ten control area
operations into one.  The report concludes that generating capacity
resources should be adequate to meet projected electricity demands in
other areas of North America this summer.

 The assessment also points to concerns regarding north-to-south
transmission transfer capability in the eastern portion of the United
States, particularly east of the Mississippi River.  The ability to
transfer electricity from the north to the south in the Eastern
Interconnection was severely tested last summer, spurred by cool
temperatures in the north and hot temperatures in the south, as well as
high fuel prices in the south.  Early indications are that key
transmission interfaces used to transfer electricity from north to south
are already fully subscribed going into this summer, and that
transmission congestion will again be prevalent in this area throughout
the summer.

 As a supplement to its 2001 Summer Assessment report, NERC also
published a 2001 Summer Special Assessment.  This document is an
in-depth, independent examination of the expected summer conditions in
both California and the Pacific Northwest, and is based on interviews
with experts from both the California Independent System Operator
(CAISO) and the Northwest Power Pool (NWPP).

 NERC's CAISO assessment agrees with the overall conclusions of
both the CAISO and the Western Systems Coordinating Council (WSCC) ? the
CAISO will not have sufficient resources to meet expected demand this
summer and involuntary curtailments of firm customer demand (rotating
blackouts) are expected.  NERC expects supply deficiencies to be greater
than those expected by the CAISO.  NERC anticipates that firm demand may
be curtailed for about 260 hours over the course of this summer, with an
average firm demand curtailment of about 2,150 MW.

 NERC expects that electric utilities in the NWPP will be able to
serve all their firm electricity demands this summer.  However, NWPP
will not have the ability to export the amounts of electricity it
traditionally has to California or elsewhere due to limited energy
output from hydroelectric facilities resulting from one of the worst
water years on record.

The independent reports, prepared by NERC's Reliability Assessment
Subcommittee, assess the projected demand and the resources available to
meet that demand this summer, as well as transmission reliability
issues.  The reports are posted on NERC's web site at www.nerc.com.  The
web site also includes information on NERC and its transformation into
NAERO, and the electric industry's electricity supply and delivery
programs and activities.

*********************
NERC is a not-for-profit company formed as a result of the Northeast
blackout in 1965 to promote the reliability of the bulk electric systems
that serve North America. It works with all segments of the electric
industry as well as customers to "keep the lights on" by developing and
encouraging compliance with rules for the reliable operation of these
systems. NERC comprises ten Regional Reliability Councils that account
for virtually all the electricity supplied in the United States, Canada,
and a portion of Baja California Norte, Mexico.