Electricity pollution & restructuring


Henry Thompson


States with natural resources including coal, natural gas, and rivers for hydroelectric dams generate electricity. Nuclear generators also play a role in baseload generation. Electric utility companies invest in generation and transmission facilities. Franchise areas of the electric utilities cross state borders with competition at the wholesale level.

Generation and transmission are multi-state systems designed for regions. Utilities have monopoly power but prices are regulated by the Public Service Commissions. The industry is restructuring with more regulation passing from states to regional and national levels.

Retail competition means electric customers would be free to choose their electric company across state borders. Customers in high priced states would buy from cheaper states.

There is local pollution due to electricity generation with hydrocarbon fuels. Gas fired generators are relatively clean. Coal is the main fuel and more polluting. The Environmental Protection Agency EPA requires the best available technology BAT for controlling emissions but living near a coal burning generator is unhealthy.

Exporting states suffer the pollution. The economic question is whether the income from selling electricity is worth the costs of pollution. The political question will be who makes any changes as the electric industry restructures.