The United States faces an electricity shortage in the 1990s that could mean a return to summer blackouts because utilities have been delaying or canceling construction of so many new nuclear and coal power plants, according to a major government study released yesterday.
Reliable electric service may "be jeopardized in much of the nation by 1990," concludes an Energy Department report called "The Future of Electric Power in America." "Such a decline would have ominous implications for national economic growth for the remainder of this century."
The study, which was designed to address the problems faced by the nation's electric utilities, concludes that this industry has come through "the most tumultuous" decade of its history and "faces substantial financial disincentives" to invest in costly new power plants.
"The substantial conservation of electricity which has occurred since the early 1970s has deferred the day of reckoning in electric power," the study said. "But the current excess of reserve capacity is likely to disappear by the end of the decade."
"The inevitable result is likely to be a less reliable, higher cost electric system," the study added.
The report estimates that "annual electric bills could be as much as $18 billion higher" by the year 2000 as utilities scramble to meet electric power demand in the 1990s, and are forced to rush costly natural-gas- and oil-fired turbines into service as they did in the late 1960s and early 1970s.
Although "such turbines can be built and installed quickly at low capital costs," the study noted that they are far more expensive to operate than nuclear or coal power plants, which require a much longer lead time for construction.
"The cost of such a supply strategy over the long term is substantially higher electric prices and higher oil imports," the study said.
The interagency study observed that most Americans are aware that total energy consumption has been falling since the oil embargo of 1973, but "fail to realize that electric demand has continued to increase" and has "consistently outpaced" growth in the gross national product.
"These trends are expected to continue," the study said.
While demand for oil and gas is expected to grow at a slow place, "if not actually decline," in the years ahead, the study said "electric demand can be expected to continue to grow at a rate at least equal to the growth of the nation's economy throughout the remainder of this century."
While the electric power industry appears "overbuilt" today, with reserve margins of 30 to 35 percent, the study said that, unless most of the additional 152,000 megawatts of new capacity still planned after recent cancellations is completed by 1990, the industry reserve margin will drop below 20 percent--the level needed to meet peak demands.
The study was to contain recommendations on how the government could help utilities meet America's future electricity needs, but Energy Secretary Donald Paul Hodel--who took office last November--has been less than enthusiastic about the report's conclusions.
As a result, the report released yesterday said the question of "appropriate government actions will be dealt with in a subsequent volume."