Louisville, Kentucky (Platts)--4Dec2012/523 pm EST/2223 GMT

Coal-fired power plant retirements are lowering reserve margins across the ReliabilityFirst region, but the Akron, Ohio-based regional organization of the North American Electric Reliability Corp. said Tuesday it still is forecasting more than adequate generation capacity this winter.

In a 2012-2013 winter assessment report made available to Platts, ReliabilityFirst projects a reserve margin of 61,900 MW, or 42.8%. While still lofty by traditional industry standards, it nevertheless is substantially less than the 58.9% reserve margin for last winter.

The forecasted coincident peak demand for the ReliabilityFirst region this winter is 144,700 MW, or 10,200 MW higher than the 2011-2012 winter peak demand of 134,500 MW.

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The main reason for the increase is a reduction in the amount of contractual demand response available this winter in the PJM Interconnection footprint, according to the report.

"Weather and economic conditions have a significant influence on electrical peak demands," the report added. "Any deviation from the original forecast assumptions could cause the actual peak to be significantly different from the forecast."

Paul Kure, ReliabilityFirst's principal engineer, said in an interview the reduced reserve margin is the main change in this year's report.

"The reserve margins are down a little from last year because after the summer peak, a number of companies have announced retirement of generation," he said. "But we still have adequate generation. Our long-term assessment is that we didn't see any major problems with generation."

Still, it is an issue that will be watched closely by ReliabilityFirst in the coming years.

ReliabilityFirst has 65 regular and associate members in all or parts of several Midwestern and Eastern US states plus the District of Columbia.

Together, they serve about 72 million people -- covering all of the states of Ohio, Indiana, West Virginia, Pennsylvania, Delaware, New Jersey and Maryland, as well as the District of Columbia. Also included are parts of Illinois, Kentucky, Michigan, Virginia and Wisconsin.

--Bob Matyi, newsdesk@platts.com
--Edited by Keiron Greenhalgh, keiron_greenhalgh@platts.com

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