Last week, the Virginia Electric & Power Co. announced the cancellation of construction of the North Anna 3 nuclear generating unit, writing off $540 million in costs, at least a portion of which will probably end up in customers' bills.
A few months ago, Potomac Electric Power Co. made a similar, but less dramatic decision, postponing the early stages of development -- the environmental assessment that Pepco workers call "the bug and bunny count" -- for its next coal-fired generating plant.
Both decisions are typical of what has occurred in the electric utility industry in the last 10 years, a period when both consumers and utilities have been shocked into conservation by rising prices.
For instance, during those 10 years, plans that would have doubled Pepco's generating capacity were erased from the books.
Gone are a coal-fired generating unit in Dickerson, Md., and two nuclear units that would have been built at Douglas Point in Charles County, Md. Pepco's once ambitious construction program has now become the incredible shrinking plan.
In the case of Vepco, projects that would have increased its capacity by a third have been wiped off the books. Four nuclear units, planned when annual electric consumption was growing 11.6 percent, have been cancelled, and 50 percent of the capacity of pumped hydropower facility in Bath has been sold or put under option to another electric system.
Nationally, the same thing is true. Since 1975, 116 proposed power plants have been cancelled, 85 of them nuclear and 31 of them coal- or oil-fired. That represents more than 96,685 megawatts of capacity that will not be put into production -- more than the combined electric generating capacity of Texas and California.
The market, once a booming one that grew at a rate of approximately 9 percent a year, is now stagnant. For 1982, electricity consumption nationally is expected to decline nearly 2 percent -- shocking for an industry that has never had to cope with anything but growth.
The planner's dilemma has many parts: the uncertainty of the future, the long lead-time needed before a plant can begin to operate, and the need to sort through options that no one took seriously until recently.
Uncertainty about demand is heightened by uncertainty about the economy's impact on industrial development and financing costs. "The whole planning environment is replete with uncertainty," said Pepco's director of planning services, Bill Herrmann.
"It's every bit as challenging as designing new plants," he said. "Whereas installing power plants used to be our only option, now it's one of many."
Pepco planners would be happy to see no growth in peak demands -- those draining surges that occur on hot summer afternoons when all the humming air conditioners, clattering office equipment and lights tax the system to its limit. Instead, they would like to see consumption increase in off-peak hours, to flatten out the pattern.
Pepco and Vepco are both looking at alternatives, including conservation, to costly construction, although critics of the utility industry charge that the companies could have moved further and faster with conservation efforts if not for a lingering urge to build power plants.
"They are not doing it at a serious level," according to Brian Lederer, people's counsel for the District. Pepco could have started scaling down its building program earlier, Lederer said. He added that he had engineering studies in 1978 which showed that Pepco was still proposing to add unneeded capacity.
As a result, Lederer is opposing Pepco's request to be allowed to write off the costs incurred before it cancelled the Dickerson unit in 1980 and the cost of building an oil-fired unit at Chalk Point, Md., which opened in late 1981 but is little used.
Pepco is looking at both "load management" and the possibility of extending the lives of generating units in Alexandria to keep up with its customers' demands for power. Load management means shaving the peak demand by changing consumer habits.
One approach that both companies have adopted is an experimental program in which radio controls have been installed in volunteers' houses to cut off hot water heaters or air conditioning at the utility company's command for brief periods when the systems are being especially taxed. Over 300 customers in Montgomery County are on such a system.
Vepco has had such a system available in the area of North Carolina it serves and in Virginia's Tidewater area, and will soon expand it to the entire service area. Volunteers who allow the devices to be installed receive a credit of $2.25 a month.
By charging lower rates in non-peak hours, both utilities are also trying to encourage customers to shift their consuming hours. Vepco has time-of-day rates in effect on an experimental basis and has asked the Virginia Corporation Commission to allow it to expand the program statewide. Residential customers could volunteer to pay rates on a time-of-day basis, but large consumers, such as industry and institutions, would be required to use the rates.
Pepco's time-of-day rates are in effect in the District for commercial customers, but it characterizes its efforts so far as "experimental."
No one expects any great surge in demand for electricity even though an economic recovery would boost it. Nevertheless, the industry warns that, because of long lead times involved in building new generating capacity, a crisis could occur. Such warnings have worked their way into drafts of a Department of Energy report on electric policy prepared for the Reagan administration cabinet.
A tougher question is whether the cancellations have nearly run their course. "Will the cancellation trend continue? I don't know," said Bruce Humphrey, director of energy modeling and economic research for the Edison Electric Institute, an industry group.
"There are two factors. Demand is obviously not what it was when the plants were planned. And the financial condition of the industry argues against making capital investments. There is some concern that we are reaching a critical point in the stream of cancellations because, certainly when economic growth improves, demand will resume," he said.
With a 10-year lead time for a coal plant and a 12-year planning time for nuclear plants, demand could conceivably race ahead of capacity at some point, in the EEI view.
"I share their concern," said Lederer. "They're on target in the sense that they know electricity is a central part of the economic infrastructure of the country. Whether or not that has to be supplied by investor-owned utility companies is the question. They are assuming that there is only one way to assure supply."
When it comes to building more units, "somewhere somebody has got to say 'no' and force these people to grow up . . . . It's like they're living in fantasy land," said Lederer. "The way to move toward reality is to come to the customers and say how can we put this system together" through options including more conservation and more generation of electricity away from the main power stations, he said.