But that prediction is based on the assumption that all the new power plants being planned for construction across the country actually get built. The appetite for power surely will rise. In the next four years, the report says, demand will grow by 60,500 megawatts nationally, but new capacity would offset that, providing anywhere between 109,000 and 193,000 additional megawatts during the same period, NERC estimates. That may sound comforting, but whether your pocketbook benefits will depend on whether you're in the right state at the right time. On the East Coast, where utilities have pooled power reserves since the 1920s, deregulation included stipulations about reserves utilities had to have on hand.
Adequate capacity includes pooled reserves that cover spikes in electricity demand.
The reverse is true in California, where deregulation omitted reserve requirements. That encourages utilities to keep as little extra capacity available as possible to handle usage spikes and has made its capacity shortage even more critical. One aspect of deregulation that has significantly helped states manage their power supply better is the development of a wholesale power market. That is, utilities can buy power from each other or from any power-generation facility that's selling. These nonutility power sources also sell power directly to end users.