28-01-00 Average electricity prices in most regions of North America will increase to $ 25/MWh by 2008 as more than 65,000 MW of new capacity additions ensure gas plants set the marginal price in most time periods. New capacity will also be needed to replace almost 70,000 MW of existing coal and gas plants which are at risk of shutting down due to competitive pressures, according to the findings of Annapolis, MD-based Hill & Associates' latest study. "Outlook for Electricity Markets: 2000 -- 2013".

A 13 % increase in inter-region power flows when Regional Transmission Organisations (RTOs) are fully operational will help moderate price and capacity increases, Hill & Associates found. The elimination of boundaries between control areas enable low-cost plants to extent their reach and increase their generation.
Hill & Associates employed its' extensive electricity, coal and fuel supply models to draft the new study, which forecasts electricity prices, operation for every electricity production facility,and power flows between 97 distinct regions across North America. The study encompasses 14 time periods in each season for the years 2000 through 2008 and 2013.

Other study findings include: Energy prices SERC will experience the greatest average price increases growing from $ 18/MWh in 2000 to $ 23-24/MWh by 2008. Hydro dominated regions (BPA, Idaho Power, etc.) experience price increases of $ 2-5/MWh as RTOs make their power more accessible to distant regions.
Market premiums will decreases over the next 3 years as new capacity is built and RTO development combine to increase reserve margins. Generation capacity ERCOT and Florida will each need continuous annual infusions of more than 1000 MW of capacity through 2008.
Even with Hydro Quebec's plans to reduce exports into the US, New England will not need additional capacity once the current 15,000 MW is built. The Pacific Northwest will need capacity additions of 750-1200 MW per year beginning in 2001 as demand outstrips existing capacity.
The creation of RTOs aids in keeping low cost coal plants operating and balances prices across control areas. Power flows increase up to 13 % once RTOs are fully instituted.

The study covers every generating plant in the US, Ontario and Quebec (units are used in cases of unique operations) assigned to one of 97 distinct control areas. Control areas range from specific companies (e.g., Cajun Electric Coop, AEP, etc.) to large pools (e.g., ERCOT, PJM, etc.).