The energy crisis that wasn't

As suddenly and dramatically as it appeared, the first great American energy crisis of the 21st century has seemingly vanished.

The 260 hours of blackouts forecast for California? Evaporated into an unseasonably modest summer - with no interruptions since May 8. Cities from New York to Chicago strained to the breaking point by the heat? Many have seen record demand and met it.

It's a positive development, experts say, but also a potentially deceiving one. While weather and an economic downturn have lessened demand temporarily, the United States is still in a power deficit, which prolonged extreme conditions could expose.

In an ever-greener nation, the idea of building a slew of new power plants seems as unpopular as bringing back the Yugo. But with power reserves thin, many Americans will increasingly face the choice of buying a more efficient refrigerator or fighting a new power plant in their backyard.

In some ways, it's the same old conserve-or-construct dilemma, with this decade's building boom just a repeat of what happened after the energy crisis of the 1970s. But as America grows - along with its obsession for all things electronic - the trend seems set to become a fixture on the energy landscape, leading to continuous construction and more of an outcry from both local activists and national environmentalists.

"We're not out of the woods yet," says Amy Jaffe of the Baker Institute at Rice University in Houston. This summer "doesn't mean that when demand normalizes, [current] supply will be enough."

Everyone agrees that something needs to be done. Yet a majority of Americans look unfavorably on the plan to meet mounting energy demands through a massive power-plant building campaign - an idea espoused by President Bush. In fact, his construction-heavy energy plan received only a 45 percent approval rating in a Gallup poll.

California's experience this summer, some observers say, shows that Americans are willing to conserve when the consequences are clear.

Home Depots across the state turned off 50 percent of their lighting; the Great America theme park in San Jose ran its water slides one hour less; and one hotel chain held a contest for a trip to Australia, which guests could only enter if they pledged to use less electricity.

The result has been that Californians consumed 12 percent less electricity this June than they did a year ago, adjusted for weather and inflation.

"One of the reasons we're making it through the summer is that there has been a significant response," says Carl Blumstein of the University of California Energy Institute at Berkeley. "At least some lifestyle change is involved."

To bring down demand, he says, "We have to pay attention to this. When we go to buy a new fridge, we need to get the most efficient model."

Californians' consumption for July, however, was down just 5 percent, leading some to wonder just how permanent this change will be.

And others suggest that earnest conservation and improvement in appliance efficiency - though important - are not enough. After all, energy efficiency has steadily improved over the years, yet demand continues to grow, notes Larry Makovich, senior director of power research at Cambridge Energy Research Associates in Cambridge, Mass.

According to his estimates, California - which consumes less energy per capita than any other state - needs 1,300 megawatts of new electricity each year just to keep up, and that means new development.

"There's the notion that you can conserve your way out of it, but it doesn't really add up," says Mr. Makovich. "We need new supply, and that's not going to be perfectly clean."

Indeed, across the country, power reserves are generally low - and large reserves are what provide a crucial buffer for a region in times of extreme weather.

In California, where poorly designed deregulation gave utilities no incentive to stockpile electricity for lean times, a lack of reserves was the primary cause for the supply crisis.

In Pennsylvania and the Northeast, where reserves were factored in to the deregulation equation, the power grid has held up well.

Yet every state - deregulated or not - has felt the impact of the nationwide desire to raise capacity. In Midwest states such as Indiana and Ohio, residents are complaining about new power plants designed only to ship their power to other parts of the country.

By contrast, utilities in other states want to build as close to target cities as possible to minimize the cost of new transmissions lines, causing new political and neighborhood fault lines.

Citizens and businesses in San Jose, for example have been fighting a proposed power plant there since November.

It's a new twist on decades-old activism against power-plant construction, as residents move into communities farther away from the city, and utilities seek to move closer.

"Suburbs are sprawling to where power plants are located," says Arnold Leitner of RDI Consulting in Boulder, Colo. "It has been difficult to build power plants in certain areas because of such local opposition."