As demand grows, it's either conserve or build new plants

Nov 4 - McClatchy-Tribune Regional News - Stories Rory Sweeney The Times Leader, Wilkes-Barre, Pa.

It's a clear, sultry, August day at the Susquehanna Steam Electric Station, just the kind of day energy utilities love -- and hate.

Love because such days mean more air conditioning, which means selling more electricity. But hate because they won't reap the full profit margin.

"A kilowatt of electricity on a day like today is going to cost a lot more than a kilowatt of electricity at 3 o'clock in the morning on a day in May," PPL spokesman George Lewis explained. "Electric companies are paying their highest prices to generate electricity."

The reason why is a mix of issues that, in the face of ever-rising energy demand, leaves the industry that powers nearly everything we do at a vital crossroads: either find a way to curb our voracious energy appetite or greatly expand the energy trough.

Since 2004, peak demand in the mid-Atlantic region has risen almost 17 percent.

The growth has easily outpaced supply increases, allowing the peak demand to come within 13 percent of the region's total generating capacity.

Generation companies have seen the profit potential such increases portend.

"In the past several years, we saw a decrease in proposals and plants coming online, but in the last year, we're seeing a pick up in proposals for future generation," said Ray Dotter, spokesman for PJM Interconnection, the world's largest electricity wholesaler. The company serves 13 East Coast states, including Pennsylvania.

While many of the proposals are for small natural gas plants, the trend points toward larger, more efficient units. Government and industry officials are heralding a national "nuclear renaissance," evidenced by the announcement last month that federal regulators received an application for a new reactor -- the first in the nation in three decades.

PPL, the Allentown-based power company, recently announced it was considering adding a third reactor to its 2,260-megawatt nuclear facility at Susquehanna.

To illustrate the capacity ramp-up: in September, PPL decommissioned two Northampton County coal power plants. The 150-megawatt units were the largest in PPL's fleet when they were built in the 1950s, but by the time they were shut down, they had become the company's smallest coal-fired generators.

Transmission concerns

But going bigger doesn't always mean getting better.

"If you don't have the power plants right where they're needed, you need to move" the electricity, PJM spokeswoman Paula DuPont-Kidder said. It must be sent across high-voltage transmission lines, which residents view as eyesores.

In June, the same month PPL announced it is considering the third reactor, PJM recommended PPL build a 500,000-volt transmission line by 2012 to connect this plant to a substation near Newark, N.J., about 115 miles away. Environmental groups and local officials and residents caught in the path immediately cried foul, complaining the line would cross the scenic Delaware Water Gap National Recreation Area.

"We're already seeing, and it's just my observation, that the opposition to a long-range, high-voltage line is as large as the opposition to anything I've seen ... because it affects so many people over such a wide area," state Consumer Advocate Sonny Popowsky said.

The U.S. Department of Energy fanned the flames last month when it created two National Interest Electric Transmission Corridors, one of which covers all but 15 of Pennsylvania's 67 counties, including Luzerne. The corridors would allow federal regulators to overrule states on transmission-line locations and permit builders to use eminent domain to acquire property.

The decision sparked near-universal ire from politicians. U.S. Sens. Arlen Specter, R-Philadelphia, and Bob Casey Jr., D-Scranton, Gov. Edward Rendell, the state Public Utilities Commission and state legislators expressed their disapproval to federal Secretary of Energy Samuel W. Bodman and threatened to thwart the ruling. Casey even attempted to block it.

Curbing demand

Long-standing opposition to the lines, whose detractors often say ruin picturesque vistas as they snake across rural areas, has government officials considering ways to curb demand.

Termed "demand-side response," the ideas center on getting consumers to cut back on use during high-demand periods.

To understand the logic, it's important to point out a few things:

--Energy demand changes, almost literally, at the speed of light; the infrastructure to supply that electricity does not. Even if the average demand doesn't increase, increases in peak demand mean more plants are necessary.

--Demand changes enough throughout the day that if some usage were simply rescheduled to another time, it could even out the ebbs and flows, reducing the need for increased production.

--Electric utilities don't produce the energy they distribute to customers. They buy it on the open market from electric-generation companies. That means the purchase price is based on how much demand exists.

--Utilities often charge customers flat rates, some of which, like in Pennsylvania, are capped by legislation.

To combat this, some utilities are offering so-called "time-of-use" programs. By enticing customers to change the times they use energy, utilities and customers can save money, generating companies can rely on a predictable demand and more transmission lines won't be necessary.

Duel approach needed

Which approach will win out? Perhaps neither.

"I hate to say it, but I think you have to do both ... which is not to say that I think we need to build all these big transmission lines," Popowsky, the consumer advocate, said.

He supports increasing supply where demand increases. "You always hear that, 'oh, you can't build anything on the East Coast,' " he said. "It's true that you can't build anywhere, but you could probably build something in most places. ... There are sites like the Susquehanna site ... that theoretically have more room for more units."

Like Popowsky, U.S. Rep. Paul E. Kanjorski supports the usage-curbing programs. He wistfully remembers a time when "if you left the room and left the light on, you really heard it from your parents."

Today, however, "we're a wasteful nation. We've raised a nation of children who leave lights on. ... They almost seem to consider that power is free," he said.

Regulations and programs are fine, he said, but the real work needs to be done by average people, Kanjorski said.

"So why don't we treat it like a war effort? Hell, we're in a war over oil," the congressman said. Children should be educated about energy saving at school. "After five, six years of grade school, these kids for the rest of their lives will be conservative."

That being said, Kanjorski also dreams of building transmission lines "like building the interstate highways." Not doing so will risk blackouts, so "as we push closer to that doomsday that we're running out capacity, people will say, 'Let's get it done.' "

There are various ways to go about it, he said, such as combining them along with existing lines or in other long-distance infrastructure, like highways.

And while observing property rights is important, he said, caring about how lines affect the view through someone's back window isn't. "If an ugly woman lives next to me, I may be offended," Kanjorski said. "But I'm not entitled to compensation."

So the future-energy debate comes down to this: Invest in more places like this 2,100-acre facility near Berwick, where millions of gallons of water vapor constantly rise from iconic cooling towers and, somewhere hidden deep within the plant, neutrons smash into 270 tons of uranium atoms to release energy.

Or invest in small, energy-saving practices, like doing laundry at night and installing compact fluorescent light bulbs.

Luckily, the immediate answer seems to be simple alternative. "If I had a dollar to spend," Popowsky said, "the first thing I'd do is change my light bulb."

Coming Monday: Why residential electric rates in Pennsylvania will spike in 2010 and what's being done to soften the blow.

Rory Sweeney, a Times Leader staff writer, may be reached at 970-7418.