Electricity Generation and Environmental Externalities: Case Studies examines three of the seven States that have assigned monetary values to externalities. The study has found that the incorporation of environmental externalities into the resource planning process has had little influence on the resources selected by the largest utility in each of the three States. Resource options to meet future demand for electricity and capacity include traditional supply-side options (e.g., types of fuel and generation equipment), demand-side methods (e.g., conservation and efficiency improvements and load shifting/management activities) undertaken in response to utility-administered programs; and power purchases.
The study was initiated in response to a request by the International Atomic Energy Agency (IAEA) which is preparing a comparative assessment of different electricity generation options to aid the process of planning and decision-making for the electricity sector in developing countries. EIA will present the results of this study at the International Symposium on Electricity, Health and the Environment in October 1995.
The report also examines the legislative history of Federal environmental laws and regulations which affect electric utilities and gives an overview of the economic foundations of environmental externalities. In addition, it looks at the potential future status of externalities within the context of structural changes likely to occur in an era of open competition in the industry. Other major findings of the report include:
Natural gas continues to be the fuel of choice to meet the future demand for electricity with or without the consideration of environmental externalities.
Although renewable energy technologies have been included in some resource selections, the decisions were not based on externality cost considerations.
The scope of demand-side management activities was largely unaffected by externality considerations.
As the electric utility industry grapples with issues stemming from ongoing restructuring, the future of externality considerations in resource planning becomes, at best, uncertain.
Notwithstanding what is stated above, many federal policies such as the Clean Air Act have affected utilities' resource plans and choices because the costs of compliance have been fully internalized.
EIA is an independent agency within the Department of Energy responsible for providing timely, high-quality energy information and for performing objective, credible analyses in support of deliberations by both public and private decision-makers. Copies of Electricity Generation and Environmental Externalities: Case Studies are available from the U. S. Government Printing Office or through EIA's National Energy Information Center (NEIC), Room 1F-048, Forrestal Building, 1000 Independence Avenue, SW, Washington, DC 20585, 202/586-8800. Press copies are available from EIA's press contact. The report may also be accessed electronically from EIA's FTP Server on the Internet by connecting to FTP.EIA.DOE.GOV and from the EIA Home Page by connecting to WWW.EIA.DOE.GOV.
EIA Program Contact: Robert Schnapp, 202/254-5392; John Geidl, 202/254-5570
EIA Press Contact: Thomas Welch, 202/586-1178
DOE News Media Contact: Philip Keif, 202/586/5806
EIA-95-24