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Infrastructure & A Cautionary Tale of the 2003 Northwest / Midwest Power Blackout
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INFRASTRUCTURE & A CAUTIONARY TALE OF THE 2003 NORTHWEST/MIDWEST POWER BLACKOUT

The Arizona Republic recently carried a story about the shrinking capacity of the nation’s power generation and transmission capacity. Entitled "Experts Fear Future Power Outages," the article cites the 2003 Northeast and Midwest power outage as a cautionary tale for our power future absent substantial investment in generation and transmission infrastructure. On the 5-year anniversary of the 2003 black-out, industry and government officials are lamenting the challenges facing the electricity industry in planning, constructing and financing future generation and transmission capacity necessary to provide safe and reliable power.

These challenges include rapidly escalating costs of construction materials; uncertainty of future environmental costs for building traditional power generation resources, such as coal-fired plants; moratoriums on building coal-fired plants; delays in gaining permits to build new generation and transmission infrastructure; acquiring more renewable sources of power generation.

This article echoes many of the issues identified in the Arizona Investment Council’s study of infrastructure requirements in Arizona’s electricity sector. The AIC study estimates that Arizona will need an additional 17,500 MW of power to meet electricity demand over the next 25 years. It will cost an estimated $65 to $77 billion to provide the additional generation, transmission and distribution infrastructure to meet projected growth to the year 2032. The financial health of Arizona’s power providers will be a key factor in securing financial resources and gaining access to capital at the lowest possible costs.

Given the lengthy planning and construction horizons to build the next generation of power plants and transmission lines to serve Arizona, we need to act now, if we are to secure our future. As described in the AIC infrastructure study, "(a)n unwillingness to confront the challenges posed by Arizona’s forecast growth will not only limit the opportunity to become one of the region’s leading economic centers, but may end up stifling growth itself."


Gary Yaquinto, AIC President