Trends in Gulf Coast Power Supply, Demand, and Costs

Abstract

During the 1980s, both the cost and availability of industrial electric power will become critical to corporations contemplating expansions and new sites along the Gulf Coast. Fuel costs have grown rapidly, and the shift to coal and nuclear power has sharply driven up capital outlays for new generating stations. Power costs have risen accordingly and will continue to do so for the foreseeable future. Furthermore, the rates of cost increases will vary widely among the utilities on the Gulf Coast so that their competitive positions will change significantly over the next ten years. Reserve margins will remain adequate for some utilities. Others, though, face periods of several years in which reserve margins could fall enough to threaten brownouts and service interruptions. This paper examines the economic and environmental factors which will affect the growth of power demand. Future trends in industrial power costs are also examined. The primary focus is on the industrialized areas of the Gulf Coast, but the paper also considers many general issues.