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CNN Live At Daybreak

Will New Power Plants Create Power Glut?

Aired July 05, 2001 - 08:09   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
COLLEEN MCEDWARDS, CNN ANCHOR: For months now, we have been telling you about an energy crunch, particularly in the Western states.

But as CNN's Brooks Jackson reports, new power plants could actually create a new power glut.

(BEGIN VIDEOTAPE)

BROOKS JACKSON, CNN CORRESPONDENT (voice over): What power shortage? An average of one or two new power plants are scheduled to come online in the U.S. every day this month.

CHRIS SEIPLE, RDI CONSULTING: The amount of capacity being added this year is more capacity than has ever been added in any year in the history of the United States.

JACKSON: California Governor Gray Davis recently threw the switch on the state's first new power plant in a decade.

GOV. GRAY DAVIS (D), CALIFORNIA: We're moving stuff online as quick as we can.

JACKSON: And days later, the second -- but that's nothing to what's going on nationally. This gas-fired plant in Delaware is going online this summer, part of an unprecedented national boon in power plant construction.

Construction stagnated in the late '90s, just as economic growth was increasing demand, creating a squeeze. But last year, more new electric capacity was added than in any year since 1994: nearly 24,000 megawatts, with lots more to come.

The amount of power generation now under construction or on the drawing boards has doubled in the last 12 months, according to the Electric Power Supply Association.

LYNNE CHURCH, ELECTRIC POWER SUPPLY ASSN.: Competitive power supplies in the United States are trying to build as much as 370,000 megawatts of new generation throughout the country. And that's the equivalent of over 600 new sort of medium-to-large-sized power plants.

JACKSON: That's equivalent to an increase in total U.S. generating capacity of 45 percent. Practically all of the new construction, like this plant going up in Roopville, Georgia, is being done not by electric utilities, but by a new breed of private companies specializing in power generation.

CHURCH: These companies are investing their own money. And they're taking the risk that they're going to be able to compete and to sell their power.

JACKSON: The competition should help hold down prices to consumers. In fact, several analysts on Wall Street and in Washington are saying the industry is overbuilding.

The new plants are efficient. Nearly all are gas-fired turbines using designs that get more electricity out of the fuel than older turbines. And the new plants are far less polluting than many of the old plants, some of which are likely to be retired.

(on camera): Nobody expects all the projects on the drawing boards to be completed. Some may be blocked, others abandoned. But the big boom in new construction shows market forces are responding powerfully.

Brooks Jackson, CNN, Washington.

(END VIDEOTAPE)

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