Down to the Wire: Why California Isn't The Only Place Bracing For Electrical Shocks --- In Deregulated Environment, Many States Are Vulnerable To Erratic Pricing, Supply --- Warning Signs in Manhattan
From Manhattan to Montana, worries are mounting that a California-style electricity crisis could be on the way.</br></br>The problem is rooted in the nation's piecemeal, poorly thought-out utility-deregulation process, which planted time bombs that could continue to explode across the nation for years to come. Deregulation in the '90s prodded many utilities to sell off power plants and then to sign long-term contracts to buy back the output. Now, those contracts are expiring. That will mean utilities are going to be buying electricity at much higher prices on the open market -- at a time when ownership of power plants is increasingly concentrated in relatively few hands.</br></br>Another big problem: The transmission lines that carry electricity are growing old and overloaded. But in the chaotic world of deregulation, few have sufficient financial incentive to upgrade the lines. The result: In some parts of the country there may be no way to deliver enough power when and where it's needed most.</br></br>While the rest of the country is in better shape than California, some ominous clouds are already gathering. Supplies in several regions are tight. Prices are rising sharply, affecting not only consumers in the 24 states that have already been deregulated but even some in states that haven't. An ill-timed heat wave from Maine to Pennsylvania could plunge parts of the Northeast into a power crisis. The breakdown of a few big power plants in the West could reverberate through nearly a dozen states.</br></br>Whole chunks of the country, in other words, are balancing on "the knife's edge" between scant sufficiency and outright shortage, says Douglas Logan, a principal at energy firm RDI Consulting in Boulder, Colo.