From January through July, more than 89,000 Mw were shelved or canceled. During all of 2001, developers tabled or canceled more than 60,000 Mw of capacity, twice as much as in 2000. Since January 2000, a total of 180,000 Mw has been affected. Platts NEWGen, Boulder, Colo., is a unit of the McGraw-Hill Cos., which also publishes ENR.

"Black & Veatch has been affected by the slowdown of the domestic powerplant construction market," says Ron Wood, president of the Kansas City-based firm's energy engineering & construction division. "We have had some projects canceled or delayed, and we are seeing fewer domestic project opportunities." The company's U.S. work has declined about 50% since summer 2001, and Black & Veatch now is pursuing opportunities overseas, where the market is stronger, Wood adds.

The changes are accelerating in 2002, says Katrina Sumey, product manager for the NEWGen database. Cancelations mean the end of a project, but tabling usually means a deferral, she adds. Projects put on hold may be resurrected if the market turns around.

California last year suffered power outages and wild fluctuations in power prices. Now it leads the country in shelved and canceled projects–more than 17,680 Mw since the beginning of 2001. Claudia Chandler, spokeswoman for the California Energy Commission, says the state's demand growth is 1,000 Mw per year. She says that 50% of California's power comes from plants that are 30 years old or older and that the commission is mindful and working to ensure that new generation keeps up with demand. Between August 2001 and July 2002, California added 2,776 Mw. The state will add 3,643 Mw between August 2002 and July 2003, she says.

Chandler says some of the tabled and canceled plants may have been a result of the "Gold Rush," when power developers crowded the state in response to high power prices. The return to historical levels now has made the market less attractive.

Mirant Corp., Atlanta, leads private power developers with the largest amounts of capacity tabled and canceled. Mirant has shelved or canceled outright more than 9,900 Mw since January 2001 and more than 7,700 Mw since the December 2001 numbers were reported. Spokesman David Payne says Mirant is taking an extremely detailed look at its capital expansion budget and carefully prioritizing plant development.

San Jose, Calif.-based Calpine Corp.'s 9,338 Mw of shelved or canceled capacity is the industry's second-largest. Spokeswoman Katherine Potter says 89 turbines are being canceled or deferred. But 34 projects are on "hot standby," and developers are postponing the final decisions to build until the groundbreaking phase, she says.

In January, Calpine CEO Peter Cartwright said Calpine was postponing $2 billion worth of projects to avoid a credit crunch. Last December's Enron bankruptcy raised questions about excessively leveraged private-power developers, forcing many to reduce their debt.

According to Joel Levington, a research director at Standard & Poors, powerplant constructors are not feeling an immediate impact from shelved projects. But "as the backlog of projects is worked off, revenues and earnings will feel a major impact in the second half of 2003 and into 2004," he says. "The impact on equipment manufacturers is more immediate, as there is quicker erosion of backlog." S&P also is a McGraw-Hill unit.

If the immediate future looks grim, observers are more sanguine for the long term. Black & Veatch's Wood says, "We believe the domestic power projects will follow the U.S. economic climate. Most expect that the domestic economy will improve into 2003 and beyond. Thus, we believe that prospects in the domestic power market will remain slow entering 2003, but it will pick up in the second half of the year."