State Can Hold Off on Building Power Plants for Decade

California has such a surplus of electric power generating plants that major utilities can forgo constructing new energy facilities for the next 10 years, the Legislature was told Tuesday.

The conclusion by the state Energy Commission signaled a dramatic reversal from only a few years ago when utilities and government regulators alike warned repeatedly of electricity shortages, brownouts and rolling blackouts if new generating facilities were not built.

But in testimony before the Senate Energy and Public Utilities Committee, Energy Commission Chairman Charles Imbrecht said California now can produce all the power needed for the foreseeable future.

As a consequence, Imbrecht testified, for the first time in the commission’s relatively short history, some energy producers will be told that “their project may not be needed at this point in time.”

Imbrecht said that on the basis of 45 days of public hearings, the commission concluded that “moderate” growth rates in the demand for electricity, coupled with major recent additions to the supply system, have combined to create a “substantial oversupply” of electrical generation capacity.

Among the causes of the oversupply, Imbrecht said, were continuing conservation efforts by consumers, increased efficiency of many new appliances and other products, and “intense” competition from independent energy producers. Among these independents are industries that produce some of their own power with co-generation techniques and a variety of small public and private operators of windmills and hydroelectric plants.

The commission, which is charged with approving new power plants, forecast in a report that the wealth of generating capacity will stretch deep into the 1990s. In a briefing document for the legislators that was based on the report, the committee staff predicted “only moderate rates of growth in electricity demand” through 1997, with peak demand and annual consumption of electricity rising “at a rate just over 2% per year.”

Executives of major utilities, including Southern California Edison Co. and Pacific Gas & Electric Co., concurred in the commission’s findings and said that they closely parallel their own private forecasts. Imbrecht said Edison and PG&E; currently have no powerhouse construction applications before the commission for approval but that some smaller independent energy producers do or soon will.

Although Imbrecht asserted that the excess capacity rendered major new plants unnecessary, he refused to use the word “moratorium” to characterize the commission’s new attitude toward construction of additional power plants.

“If no projects are approved in the next five years, the lights are not going to go out in California. That is not going to happen,” he told the committee. “All I am suggesting is that we slow down, proceed cautiously and thoughtfully.”

He said that rather than outright disapproval of proposed power plants operated by independent producers, the commission may “delay” giving its endorsement to a project or may approve it for operation on an “intermittent” basis until the facility is needed for full-time production.