Heat wave, drought put double squeeze on utilities. Power production and waterways drop

Temperatures are up. River levels are down. Call it a one-two punch for the nation's utilities.

As power producers struggle to meet record demand for electricity in many parts of the country, they must also face the limitations on power production introduced by the drought. Lower levels on the nation's waterways mean:

Hydroelectric generating capacity has been reduced an average of 21 percent nationwide. The Tennessee Valley Authority, which serves a seven-state region in the parched Central and Southern United States, has had its hydroelectric apacity cut by more than 50 percent. Utilities have turned to increased production at coal, oil, natural gas and nuclear-fueled generators to make up for the shortfall.

Less water is available for cooling fossil fuel and nuclear plants. Power stations in the the Midwest and Southeast, largely dependent on river water for cooling, have had to reduce generating capacity because of water shortages. Utilities are limited in the amount of thermal discharges (usually heated water) that they are allowed to return to the natural water supply, in order to protect the river and marine environments near generating facilities.

The heat wave has increased temperatures of river water, thus further reducing the cooling capacity of the available water.

Shipments of coal have been delayed, given the slower pace of barge traffic on the Mississippi and Ohio river systems. However, the Department of Energy (DOE) says, that coal stocks maintained at generating facilities have been sufficient to sustain plants' operations.

River waters that empty into salt water are becoming increasingly saline. While the brackish water may be used for cooling purposes, it is unfit for use in steam generators. A wedge of salt water has been contained on the Mississippi 30 miles below New Orleans, though one utility in the area is reported to have arranged for fresh water to be barged in for steam production, according to the Army Corps of Engineers.

A recent energy-report card shows that, in general, electrical production in the Midwest (the Dakotas, Kansas, Iowa, Minnesota, and eastern Montana), Northeast, and Southeast (Virginia, the Carolinas, Georgia, Alabama, Florida, and Mississippi) has been most troubled by the summer heat and drought. The east-central area (Ohio, Indiana, Kentucky and West Virginia) remains largely unaffected, according to the North American Electric Reliability Council (NERC).

Though utilities in the Northeast depend less on hydroelectric power than the Midwest and Western areas of the country, Northeastern power producers have had the most difficulty responding to the seasonal demand for electricity.

Part of the problem is that when Northeastern utilities want to import power from Midwestern suppliers during peak demand periods, transmission lines between the two regions are often already at capacity carrying routine transmissions, says Gene Gorzelnik of NERC. As a consequence, many Northeastern utilities have asked consumers to voluntarily curtail electrical use. Some areas have suffered voltage reductions.

``[Transmissions of emergency and spot purchases of electricity] are complicated by the fact that power travels the path of least resistance. And energy going from the Midwest to the Northeast may have to go through West Virginia and up or through Canada and down,'' Mr. Gorzelnik says.

While industry observers say the trade in power between regions is routine - all utilities must allow for times when their generating stations go off-line in emergencies or for maintenance - some are also saying this summer's energy pinch is a harbinger of increased demand in the long run.

``A lot of utilities are reaching peak loads that they forecast for the early [1990s] this year,'' says Marie Corie, an analyst with Applied Economic Research in New York.

Industry projections now indicate that total generating capacity will have to increase over the next 10 years, says Gorzelnik. For the last 15 years industry projections have indicated negative or zero growth.