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Power plant construction report: The boom is still on

Arlington, Va., April 12, 2002 — Energy Ventures Analysis Inc. (EVA) has released its March 2002 report, Tracking the Boom of New Power Plants in the U.S.

The report notes that at the end of the first quarter of 2002, a total of 263,000 MW of new gas-fired capacity is under construction or active development. In addition, approximately 11,000 MW began operation during the quarter. Over the 1998 to 2007 time frame, 348,000 MW of capacity has begun operation or is under development which represents a six percent decrease over the prior quarter.

However, EVA’s own plant-by-plant assessment indicates that further cancellations and/or delays will occur as the year advances, such that only 291,000 MW of the industry planned capacity will actually get built.

“The flurry of cancellations and delays have resulted in the net loss of 20,000 MW of capacity under active development during the first three months of the year” said A. Michael Schaal, Senior Analyst with EVA. “The recent pull backs are due to a number of factors, of which the loss of easy access to financial markets is just one. Other factors reviewed in the report. The quickly changing environment for adding capacity highlights the ongoing uncertainty that will continue to exist for the industry concerning how much capacity will be built, where and when.”

The report, Tracking the Boom of New Power Plants in the U.S., tracks trends in project developments, and the distribution of these projects through the U.S. The magnitude of how much gas-fired capacity is being built, and how quickly, can be difficult to fully appreciate.

For example, in considering those projects already in construction, or nearing construction, one new power plant is anticipated to become operational every three days during 2002 and 2003.


Forecasting The Boom For the past several years EVA has only reported on the aggregated plans of merchant power plant developers. Now EVA also reports on its own forecast of how much of the 348,000 MW currently being pursued by developers will be built. “EVA’s latest evaluation of all pre-construction phase projects leads us to forecast that an additional 57,000 MW currently still under development will not be built,” stated Stephen L. Thumb, director of EVA’s natural gas practice. Tracking the Boom of New Power Plants in the U.S., March 2002, can be purchased by contacting A. Michael Schaal at EVA, or on the internet through EVA’s collaboration with economy.com at www.economy.com/research. Additional detail as to the report methodology can also be found on EVA’s website.

The North American Electric Reliability Council (NERC) recently selected EVA to track new power plants. EVA’s CCGT database used by NERC is the same as used in the report, Tracking the Boom of New Power Plants in the U.S., March 2002. Further details are available at the EVA website or the NERC website, www.nerc.com.

About EVA: Energy Ventures Analysis, Inc. (EVA) is an energy industry consulting firm based in Arlington, Virginia. Over the past 25 years, EVA has developed a national reputation in the electric, gas, coal, oil, utility, and environmental fields. EVA studies have been used for corporate strategies, Public Utility Commission proceedings, court testimony, Congressional hearings, governmental rulemaking, and energy conferences. EVA offers a wide-range of economics and technical services in the energy and environmental areas.