Letter to the Editor

Fortnightly Magazine - May 2004
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Letters to the Editor

To the Editor:

Recharge the Economy with Renewable Energy Tax Credits

The article "NERC's Cloudy Crystal Ball" () contends that the North American Electric Reliability Council (NERC) has consistently underestimated the growth in U.S. electricity demand. The only evidence offered for this conclusion is that observed data did not encircle the 45-degree line in a graph of actual vs. forecast percentage growth rates. Conjectures such as this are invalid for numerous reasons.

First, average peaking temperatures are used to determine projections of electricity demand while actual climatic conditions influence reported peak demand. Because the author relied only on percentage changes between actual and projected demand, misalignment of temperature assumptions is likely to lead to imprecision.

Second, electricity demand forecasts are reduced by interruptible and curtailable loads. Large industrial customers, for example, will often agree to shed load when capacity is constricted in exchange for lower tariffs. When sufficient capacity exists, however, these loads are served because it is economic to do so. Any direct comparison between actual and projected load must take this circumstance into account.

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