Electric Powerplant Cancellations and Delays

The reasons for and potential effects of electric powerplant cancellations and delays on the utility industry's ability to continue providing adequate and reliable supplies of electricity are examined in detail.

Five primary reasons for powerplant cancellations and delays were found, including: (1) the sharp decrease in the rate of increase in the demand for electricity since 1974; (2) difficulty in financing powerplant construction; (3) an uncoordinated, complex, and slow regulatory system; (4) problems surrounding the acceptability and future of nuclear power; and (5) construction problems such as the lack of construction material, the lack of adequate numbers of skilled craftspeople, and low productivity. Continued generating unit cancellations and delays may contribute to: (1) increasing oil consumption, making the United States more dependent on foreign sources; (2) jeopardizing the utility industry's ability to provide uninterrupted electrical service; and (3) increasing electricity rates as consumers bear the added cost of delays. Two important considerations in determining whether any action is required to prevent powerplant cancellations and delays are (1) assumptions about the rate of increase in the demand for electricity, and (2) the extent to which canceled or delayed nuclear or coal-fired plants have been or are to be used to replace oil-generated electricity plants. GAO found that electrical generating capacity should be generally adequate at least to 1988, although reserves could be more abundant in some regions than others. Areas of continuing attention should be electricity planning, utility finances, and the impacts of environmental and economic regulation on the utility industry.