Power Demand May Never Come Back Power Companies Say

Rebecca Smith has another article in the Wall Street Journal on the collapse of electrical power demand in the US.  Here is a link to the article.

While PJM Interconnection engineers claim in their PATH application that power demand will return to the 1.5% to 2% per year they have assumed in their argument for the need for PATH, the rest of the US power companies disagree.

Even AEP CEO Mike Morris says:

… his company is counting on industrial demand recovering about a third of the lost ground in 2010.

Beyond that, he is wary of making predictions. “I don’t know if we’ll ever get all of it back,” he said, acknowledging that factory closings in the auto sector will have a lasting effect.

And PATH is half owned by AEP.

Morris’s statement also contains the reason why AEP is so desperate to build PATH.  AEP has been the largest power supplier to the Michigan and Ohio based car industry.  That industry is gone.  AEP is desperate to get connected to a new power market, like the east coast, and it has found a way to get power consumers to pay for it directly, while earning AEP a guaranteed 14.3% profit.

Electrical power experts George Loehr and Hyde Merrill have shown in their VA expert testimony that PJM Interconnection’s assumptions of future peak power flows in PJM are wildly inflated.

How can PJM justify those power flow numbers when even Mr. Morris says “I don’t know if we’ll ever get all of it back”?