The U.S. needs new generating capacity in coming decades to meet growing electricity demand. The increasing scarcity of land within utility load centers, combined with environmental opposition to the siting of plants, often limits siting options to remote locations. Restricting power plants to distant sites necessitates additional transmission facilities, increases delivery costs and electric bills, and makes maintaining system reliability more difficult.
The common response to community opposition to a proposed power project is to castigate the concerned citizens for NIMBYism. This criticism is understandable, but somewhat unfair. Everything else being equal, few businesses or residents (there are exceptions, see "Please, in my backyard," November/December POWER, p. 4) welcome a power plant, however "clean," as a next-door neighbor. Generally, however, ratemaking practices fail to compensate citizens who sacrifice their quality of life for the benefit of their regional, human neighbors.
Potential benefits for all
A fairer and more sensible approach might be to use ratemaking rules to reward citizens who agree to bear an environmental burden for the greater good. For example, a community that willingly permits a plant adjacent to its other facilities, such as waste disposal or water pumping, could be offered a rate discount for commercial or residential usage. Similarly, an industrial facility that offers land for a 500-MW plant could be offered a discount on its 20-MW share of the plant's capacity. Alternatively, an enterprise might be given the option to buy its power directly from the generator on a "direct access," or "behind-the-fence" basis, at a lower rate. In both cases, almost all of the incremental generation would benefit the utility's other customers.
The economic, system reliability, and other advantages that accrue to a utility, and all ratepayers, when a community welcomes a new power plant are significant:
- If it's better received by the public, a plant can be built sooner and likely at a lower cost. Greater scheduling certainty also facilitates planning of supply-demand balancing.
- If power plants are sited closer to load centers, transmission facilities to deliver the generator's power will cost less to build, transmission line losses will be reduced, congestion constraints minimized, and regional and local reliability improved.
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