Laserfiche WebLink
<br />5-1 <br /> <br /> <br />~. ~'.?'''l <br /> <br />SECTION 5.0 <br />ELECTRICITY PRICE PROJECTIONS <br /> <br />Projections of average electricity prices (all rate classes) and small <br />commercial class electricity prices were developed using a simple engineer- <br />ing economic methodology, based on expected generating capacity and fuel <br />utilitization in the six High Plains states. <br />The aggregate electric generating capacity in the six High Plains <br />states has been predominately natural gas and oil fueled capacity. In <br />1977 over 70 per cent of the electricity generated in the region was by <br />natural gas fueled power plants. Only about 23 per cent of the electricity <br />1 <br />was generated by coal fueled power plants. <br />The Powerplant and Industrial Fuel Use Act of 1978 essentially man- <br />dated the displacement of natural gas and oil fueled generating capacity <br />by coal fueled generating capacity having flue gas desulfurization (FGD) <br />systems. The higher incremental fixed costs ($/kW) and variable costs <br />($/kWh) for such capacity will have a definite effect on electricity prices <br />in the six-state region. In addition, existing coal fueled generating <br />capacity is, generally speaking, not equipped with FGD systems; as this <br />capacity is retired from service over the 40-year study period, it will be <br />replaced by. coal fueled capacity with FGD systems having higher incremental <br />costs. <br />Electricity price projections were made based on estimated future <br />capacity and generation mixes f with the following four assumptions. <br />. Future generating capacity would primarily be coal fueled capac- <br />ity with FGD systems. <br />. Federal and state tax policies would remain more or less as they <br />have beell with respect to the electric utility industry. <br />. Over the long-term, the cost of money would not be significantly <br />higher th.sn in the past. <br />. Utility system growth rates and load factors would not decrease <br />significantly. <br />