Present Situation of Hydroelectric Power

The electric power industry got off to a rough start in the twenty-first century, with the dark cloud of distrust hanging over the sector after California experienced severe power shortages and outages during 2000 and 2001 and Houston-based Enron was raked over the coals for fraudulent accounting practices. Distribution sales began to fall in the second quarter of 2001, by 3 percent, and continued to fall every quarter through 2002. Total sales during 2001 for the 250 largest distributors of electrical power fell by 8.4 percent to an estimated $36.9 billion and profits reported in 2002 decreased approximately 3 percent from 2001. Although the industry was forecasted to move toward recovery during the second half of 2003, the transition toward positive growth was expected to be slow. The patchwork efforts at deregulation added further to the industry's instability. When the industry deregulated, too many power plants were built too fast, causing a surge in the margin between supply and demand. Supply was at its highest since 1992, but in 2001 demand was at its lowest since 1987. As a result of lack of investor funding, continued construction of power plants has been scaled back. Only one out of every seven proposed new plants that has received government approval is actually under construction. Nonetheless, the supply-demand margin is expected to double by 2004. A rebound in the economy, a return of cold weather, and new standardized federal regulation are expected to help stabilize the industry in the upcoming years.