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The Nation

May 03, 1987

The nation's electric utilities have all but stopped building power plants despite warnings by the government and some industry analysts of power shortages in the 1990s, a study said. Power companies are ignoring the warnings, partly because the current market for electricity is "glutted with excess capacity in most regions of the country." The study, by the nonprofit Investor Responsibility Research Center Inc., found that power plants at the end of 1985 provided 35% more capacity than electricity consumers demanded. In addition, new plants are expensive and utilities face other barriers to making a profit, including unfavorable tax laws, high performance standards and slashed rates of return imposed by state legislatures and regulators.

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