ENERGY IN TEXAS VOLUME I: ELECTRIC-POWER GENERATION ENERGY IN TEXAS VOLUME I: ELECTRIC-POWER GENERATION LYNDON B. JOHNSON SCHOOL OF PUBLIC AFFAIRS POLICY RESEARCH PROJECT REPORT ~ FOREWORD The Lyndon B. Johnson School of Public Affairs has established interdisciplinary research on policy problems as the core of its educational program. A major part of this program is the policy research project, in the course of which three faculty members, each from a different profession or discipline, and about fifteen graduate students with diverse backgrounds examine an important issue and make policy recommendations based on extensive research and analysis. These projects are con­ducted in response to public and governmental needs. Energy policy in Texas is a matter of obvious importance, and it has received particular attention at the LBJ School. This volume , concerned with electric power generation, is one of two policy studies which resulted from policy research projects on energy in Texas, conducted over a two-year period (1972-74) at the LBJ School. Additional work was done during 1975 in order to incorporate the most recent information into this volume. It is our hope that this report and its companion volume (Energy in Texas, Volume II: Policy Alternatives) will be of value both to policy makers and to the public in considering policy alterna­tives for energy in Texas. Kenneth W. Toto Acting Dean PREFACE This publication is the product of a Policy Research Project on State Planning for Electric Power, undertaken by the Lyndon B. Johnson School of Public Affairs during the academic year, 1972-73. Eleven students and three faculty members participated in the project. Further research on electric power development was completed during the summer of 1975 and additional data from the Federal Power Commission was integrated into the report. The study was initiated in response to a public need for information about power system planning in Texas and an assessment of the risks and benefits of alternative forms of power generation. Structurally, the report is divided into six chapters that describe and analyze the state's electric power industry (Chapter I), its future electricity demand (Chapter II), fuel costs and resources {Chapter III), environmental considerations in electric power generation {Chapter IV), power-plant siting procedures {Chapter V), and public participation in power system planning (Chapter VI). Current changes in fuel prices and regulatory policies are also included. In its present form, this volume has been approved for publication by the project's faculty and is responsive to comments and corrections offered by reviewers of an earlier draft. A companion volume (Energy in Texas, Volume II: Policy Alternatives) prepared by a separate policy research project, but under the same Director, surveys a much broader energy spectrum and develops a number of state policy alternatives for coping with immediate and long-range energy demands. Marian Blissett, Project Director Kingsley E. Haynes Kenneth W. Tolo POLICY RESEARCH PROJECT PARTICIPANTS Mary Lu Barras, B.A. (Mathematics), Hood College; M.L.S., The University of Texas at Austin. Phillip Blackerby,A.B. (Economics}, Brown University. Michael Donovan, B.A. (Financial Management), Boston College. Ken Ferguson,B.B.A. (Management), The University of Texas at Austin. David Jolly,B.S. (Economics}, University ofSanta Clara. Robert King, B.E. (Civil Engineering), Vanderbilt University. Miland Patil, B.T. (Electrical Engineering}, Indian Institute of Technology, Bombay; M.S. (Electrical Engineering), Carnegie-Mellon University. Melvin Waxler, B.A. (Government and Psychology), The University of Texas at Austin. Janet Weiskott, B.A. (Economics), Brooklyn College. Marc Wiegand, B.A. (Plan II}, The University of Texas at Austin. Gregg Young, A.B. (Government), Dartmouth College. Madan Blissett, Project Director, Associate Professor of Public Affairs, Lyndon B. Johnson School ofPublic Affairs, The University of Texas at Austin. Kingsley E. Haynes, Associate Professor ofPublic Affairs, Lyndon B. Johnson School of Public Affairs, The University of Texas at Austin. Kenneth Tolo, Associate Professor ofPublic Affairs, Lyndon B. Johnson School ofPublic Affairs, The University of Texas at Austin. v SUMMARY OF RECOMMENDATIONS FITTURE POWER RELIABILITY Future power reliability should be met by increased generation capacity, not by regional interconnections. ELECTRICITY DEMAND AND CONSERVATION Electric-power planning in Texas in the next two decades is not likely to be changed because of population trends or in-migration patterns. Thus, for short-term planning, neither the price of electricity nor population trends will make a significant difference. Long-range planning, however, can be substantially affected by pricing policies. The price of electricity, identified as an important and adjustable factor, can be used to conserve energy as well as to influence the growth of electricity demand. DIVERSIFYING THE USE OF BOILER FUELS Power-system planning in Texas should aim for greater diversity in the use of boiler fuels. Current reliance upon natural gas as the primary boiler fuel must be decreased and provisions made for the greater use of lignite, coal , and nuclear power. NEW BOILER TECHNOLOGY FOR FOSSIL-FUEL PLANTS Efforts should be made to improve the economy of fossil-fuel plants in the future by constructing boilers capable of burning a combination of coal, fuel oil, and natural gas. USE OF WASTE HEAT FROM POWER PLANTS Attention should be drawn to the use of waste heat for irrigation, desalination of sea water, certain chemical processes in industries, and heating purposes in nearby structures. SURVEY OF POTENTIAL POWER-PLANT SITES The electric utilities in cooperation with the Governor's Power-Plant Siting Committee and the Governor's Energy Advisory Council should conduct a survey of potential power-plant sites in the state, including an analysis of the local and regional impacts that would result from alterna­tive siting patterns. THE RIGHT OF EMINENT DOMAIN TO COAL-SLURRY PIPELINES Diversifying the use of boiler fuels in Texas requires increased consumption of coal. A large portion of this coal will come from mines in New Mexico, Colorado, and Wyoming. Currently, the only feasible method of trans­porting the coal is by rail car. An alternative means is by pipeline in a slurry composed of pulverized coal and water. To develop this new technology it is necessary to pass legislation giving coal-slurry pipelines the right of eminent domain. JOINT PUBLIC-PRIVATE OWNERSHIP OF FUTURE POWER PLANTS In view of the rising costs of power generating plants, joint ventures should be considered that can take advantage of the tax-free nature of municipal and state-backed bonds. ELECTRIC POWER AND THE ENVIRONMENT Power-system planning should include an assessment of the environmental costs associated with the addition of new power facilities, including the misuse of water. ADMINISTRATIVE PROCEDURES FOR ELECTRIC POWER-PLANT SITING IN TEXAS The siting of nuclear and fossil-fuel plants requires permits from both federal and state agencies. Within Texas, the regulatory procedures for protecting air and water resources should be periodically reviewed to insure con­tinuing conformity with federal and state policies. PUBLIC PARTICIPATION AND POWER-SYSTEM PLANNING A balance must be struck between the interests of the public and the expertise of the utility. If concern for an adequate power supply is to be weighed more heavily than environmental impacts, then the present efforts of utilities to meet their customer's demands should be regarded with less contempt. On the other hand, if public values are viewed as important elements of planning, a number of possibilities exist for insuring greater public participation. For example: a) Both state and federal agencies should respond promptly to citizen inquiries. b) Each agency should maintain a register of persons who have communicated an interest in agency matters. c) An agency should inform all registered persons of upcoming proceedings in the areas of their interest. Summary ofRecommendations d) An interested person or party should have the right to intervene in agency proceedings. e) Intervening parties should be loaned or provided with copies of documents, hearings, and testimony free of charge. fj Where circumstances warrant, intervening parties might be provided with legal assistance or counsel by the administrative agency. g) Written submissions by interested parties should be accepted for filing regardless of defects in form, substance, or omission. If such defect cannot be remedied or supplied by the agency , the interested party should be notified by mail of the defect and given reasonable time in which to remedy the defect. TABLE OF CONTENTS FOREWORD iii PREFACE iv POLICY RESEARCH PROJECT PARTICIPANTS v SUMMARY OF RECOMMENDATIONS vi CHAPTER ONE: STRUCTURE OF THE TEXAS ELECTRIC-POWER INDUSTRY Introduction Consumption Patterns by Sectors I Current Power-Generating Facilities 3 Planned Expansion of Texas Electric-Power Facilities 5 Interconnection 5 CHAPTER TWO: ELECTRICITY-DEMAND ANALYSES 16 Introduction 16 A Review of Electricity-Demand Studies 16 Analysis of National Electricity Production 23 Electricity-Demand Projections for Texas 32 Conservation of Energy 40 Conclusions and Policy Implications 43 Appendix A: National and Regional Demand-Analysis 45 Appendix B: Causal Analysis for Texas Projections 50 Appendix C: Potential for Energy Conservation 54 CHAPTER THREE: FUELS, RESERVES, AND FUTURE PROSPECTS 56 Methods of Power Generation 56 Fuel Costs 58 Fuel-Usage in the United States and Texas 66 Fossil-Fuel Resources in Texas 69 Fuel Perspectives for the Future 73 CHAPTER FOUR: ENVIRONMENTAL CONSIDERATIONS OF ELECTRIC-POWER GENERATION 75 Introduction 75 Thermal Discharges to the Environment 79 Radiation 85 Nuclear Waste Storage 87 Safety of Nuclear Power Plants 88 Other Environmental Considerations 90 Implications of Envirorunental Considerations 92 CHAPTER FIVE: GOVERNMENT INVOLVEMENT IN POWER-PLANT SITING Federal Legislative Framework Procedures for Siting Electric Power Plants Appendix V-A: Model State-Utility Environmental Protection Act CHAPTER SIX: PUBLIC PARTICIPATION IN THE SITING OF ELECTRIC POWER-GENERATING FACILITIES Who is "the Public"? Barriers to Public Intervention Public Standing Delays Public Involvement as Viewed by the Electric-Utility Industry Summary Table ofContents 94 94 95 110 111 111 112 112 113 114 115 CHAPTER ONE STRUCTURE OF THE TEXAS ELECTRIC-POWER INDUSTRY INTRODUCTION Due to the versatility of electric power, the state of Texas, like the rest of the nation, has experienced, historically, an 8 to 9 percent annual increase in demand for electricity. If conservation measures are not applied, most power estimates project that electricity demand will double in the next 10 years. There are a variety of economic problems associated with this growth: the need for more fuel (Texas is greatly dependent on diminishing supplies of natural gas as a power-plant fuel), the need for more electricity-generating facilities, and the need for more transmission lines. All of these needs require large-scale financing and must compete for limited capital and labor resources. In general, two policy options are available: (1) to inhibit demand, or (2) to meet the demand. In the latter case there are further options: (a) to build the necessary electric power plants and transmission lines, (b) to increase the efficiency of existing plants, and (c) to interconnect in order to take advantage of potential. efficiencies within existing electric-power systems. A coordinated effort using each of these alternatives according to its economic feasibility is likely. CONSUMPTION PATTERNS BY SECTORS In reviewing the years 1949 to 1974 it is apparent that the use of electrical energy in Texas has risen in all sectors-industrial, residential, and commercial-although not at the same rate. Industry far exceeds the other sectors in the amount of consumption (see Figure 1-1), but resi­dential and commercial use has been increasing as a percentage of total annual consumption in the state. FIGURE 1-1 ELECTRIC POWER USE IN TEXAS Billions of Kilowatt Hours 55 _ 45 ­35 25 ­15 ­5 wmCJ 1949 1959 1969 1971 1973 1974 • Residential II Commercial D Industrial Source: Federal Power Commission, Office of Accounting and Finance Texas Electric-Power Industry Total KW Hours Sold= 125 ,902,836,000 Source: Federal Power Commission, Office of Accounting and Finance TABLE I-1 AVERAGE MONTHLY ELECTRICITY BILLS FOR RESIDENTIAL, COMMERCIAL, AND INDUSTRIAL CONSUMERS IN TEXAS , 1974 BILLS Residential 250KWH $8.29 500KWH $11.58 750KWH $15.50 lOOOKWH $19.82 Commercial 750KWH $27.84 1500 KWH $51 .84 6000 KWH $162.79 10,000 KWH $235.23 Industrial 30 ,000 KWH $632 60 ,000 KWH $1,157 200,000 KWH $3,277 In 1974, the state's consumption of electricity was 35 percent residential, 22 percent commercial, and 41 percent industrial (see Figure I-2). FIGURE I-2 Statewide Consumption: By Sector 35% 41 % Industrial While industrial users consume a much greater amount of electricity, the average price per unit paid by industrial consumers is considerably lower than that paid by con­sumers in the residential and commercial sectors. {See Table I-1 .) This price differential is due to several factors : econo­mies of scale can be realized in deliveries to the industrial sector; industrial demand is relatively constant over time and is not subject to variations in temperature or other external "peaking" factors; lastly, many industrial users, because of their size, have, in the past, had the option of substituting in-house generation for commercially produced electricity. (This has induced the electric utility to offer a competitive rate in order to procure the market.) Source: Typical Electric Bills, Federal Power Commission, 1974 Energy in Texas Volume I -­ CURRENT POWER-GENERATING FACILITIES in Texas accounted for 74 percent of the statewide kilowatt capacity (see Figure 1-3) and 67 percent (see In 1973, five investor-owned electric-utility companies Figure I-4) of reported KWH sales. FIGURE 1-3 STATEWIDE KILOWATT CAPACITY: 32,043,238 KW Houston Lighting & Power Co. 28% All Others Sources: Statistics ofPublicly Owned Utilities in the U.S. for Year Ended December 31, 1973, Federal Power Commission. Statistics ofPrivately Owned Utilities in the U.S. for Year Ended December 31, 1973, Federal Power Commission. FIGURE 1-4 STATEWIDE KILOWATT HOUR SALES (THOUSANDS) 126,978,307 KW Hours Houston Lighting & Power Co. 33% Others (Public & Private) Sources: Statistics ofPrivately Owned Utilities in the U.S. for Year Ended December 31, 1973, Federal Power Commission. Statistics ofPublicly Owned Utilities in the U.S. for Year Ended December 31, 19 73, Federal Power Commission. 3 Texas Electric-Power Industry ·· In 1973, investor-owned, electric-utility companies in percent of net income for all Texas-based utility companies. Texas accounted for 79 percent of assessed utility-plant {See Figure I-5.) valuation, 89 percent of annual operation revenues, and 81 FIGURE I-5 FISCAL COMPARISON: PRIVATELY AND PUBLICLY OWNED UTILITIES Statewide Statewide Statewide Net Utility Plant Operating Revenues: Net Income: $5,242,336,919 $1,803,017 ,167 $371,685,916 Private Private Private Sources: Statistics ofPrivately Owned Utilities in the U.S. for Year Ended December 31, 1973, Federal Power Commission. Statistics ofPublicly Owned Utilities in the U.S. for Year Ended December 31, 1973, Federal Power Commission. Steam fossil-fuel generating plants were the source of 96 turbines, hydro, and internal combustion accounting for percent of the 32, 043, 238 KW total generating capacity the remaining 4 percent. reported in the state for 1973 (see Figure I-6), with gas FIGURE I-6 Total Electric Capacity by Type of Generation Total Capacity= 32,043,238 Fossil Fuel Sources: Statistics ofPrivately Owned Utilities in the U.S. for Year Ended December 31, 1973, Federal Power Commission. Statistics ofPublicly Owned Utilities in the U.S. for Year Ended December 31, 1973, Federal Power Commission. Enerl!X in rrcxa$ Vol!'me I The greater part of the state's kilowatt capacity and KWH sales is marketed in two major metropolitan areas. Houston Lighting and Power supplied 27 percent of the total 1973 state KWH sales in the Houston-Galveston area, while Dalla~ Power and Light and Texas Electric Service Company marketed 8 and 11 percent, respectively, of the state's total 1973 KWH sales in the service area that includes Dallas-Fort Worth. The investor-owned companies serve by far the largest geographical areas in the state (See Map I), and their transmission lines provide the bulk of the Texas Inter­connected System. The major transmission lines (345 kilovolts or greater) run from the Odessa area in West Texas on a line east-northeast to Abilene, northeast from Abilene to Wichita Falls, southeast from Wichita Falls to Dallas-Fort Worth, and southeast from Dallas-Fort Worth to Houston. (Current and future lines, 345 kilovolts or greater, are depicted in Map IL) Three investor-owned companies­Dallas Power and Light, Texas Electric Service Company, and Texas Power and Light-have joint ownership of the high-voltage lines that run from the Odessa area to Dallas-Fort Worth and southeast to Marlin, Texas, where they connect with similar lines owned by Houston Lighting and Power (ERCOT, 1972). PLANNED EXPANSION OF TEXAS ELECTRIC-POWER FACILITIES In view of national fuel shortages, planning for new power facilities in Texas has taken into account the need to shift to boiler fuels other than natural gas. Nuclear power is obviously one alternative, but with escalating construction and capital costs several planned nuclear projects (See Table 1-2) have been postponed. In its 1975 report to the Federal Power Commission, the Electric Reliability Council of Texas projects that by 1985 nuclear power will supply 7 ,200 megawatts of electricity to Texas consumers. While this figure is considerably below the planned nuclear capacity (see Table 1-2), it still represents 25 percent of the 28,819 megawatts that ERCOT predicts will be added in the next 10 years. Lignite and coal-fired plants constitute another alterna­ tive. ERCOT figures indicate that by 1985, 40 percent of the planned generating capacity will be supplied by lignite, while boilers capable of burning coal (if it is available) or a combination of coal, fuel oil, or gas will supply 18 percent. INTERCONNECTION The interconnection of electric-power systems is one possible method for providing increased electric. reliability in interconnected service areas. Economies are achieved by reducing the reserve requirements by sharing reserves, and by more efficient distribution of electricity. All of these benefits may be measured in terms of savings to the individual utilities and, therefore, to the customer. The primary savings occur because fewer power plants are required to meet the electric-power demand in any of the connected areas. The primary cost of interconnecting is for building and maintaining transmission lines between electric­power systems capable of handling the load necessary to ensure the reliable operation of both systems. The purposes of interconnection are : (1) to allow the transportation of electricity between areas to meet power shortages, and (2) to allow the interchange of electricity between areas, thus reducing generating-facility investments and the cost of electricity (FPC, National Power Survey, 1970). At the minimum, an interconnection should allow sufficient capacity to be transferred from one system to another to substitute for the loss of generating facilities in either system. Description of the Electric-Power System in Texas The Texas Interconnected System (TIS) is the largest electric system in the state, providing 80 percent of total electricity consumed. TIS members are: The City of Austin, Central Power & Light Co., Dallas Power & Light Co., Houston Lighting & Power Co., Lower Colorado River Authority, San Antonio City Public Service Board, Texas Electric Service Co., Texas Power & Light Co., and West Texas Utilities Co. TIS is organized into two load-control regions that are coordinated for maximum reliability through an administrative committee to provide: Determination of spinning reserve requirements, Analysis of installed generating capacity require­ ments, Transmission system study, Investigation of interconnection requirements, Transmission line loading under normal and abnormal conditions, Review of automatic under-frequency, load-shedding relays and settings, Adoption of criteria for planning and operations, and Determination of bias settings (FPC, National Power Survey, 1970). The Texas Municipal Power Pool (TMPP) is a second interconnected electric-power system in Texas and consists of the Brazos Electric Power Cooperative, Inc., the City of Garland Municipal Electric System, the City of Greenville Municipal Electric System, and the Texas Municipal Electric System (City of Bryan). Coordination for the system is achieved through a technical committee which provides for: Comparison and approval of load projections of members, 5 Installed Owner, station and unit, capacity Scheduled and location (megawatts) Status1 operation Reactor supplies Reactor type Constructor TABLE 1-2 STATUS OF NUCLEAR PLANTS PLANNED IN TEXAS, AS OF AUGUST 31 , 1974 \ Houston Lighting & Power Co.• Allens Creek 1 1,200 ACP 1980 General Electric Co. boiling-water Ebasco Services, Allens Creek 2 1,200 ACP 1982 boiling water Inc. near Wallis, Austin County Gulf States Utilities Co. Blue Hills 1 930 ACP 1981 Combustion pressurized-water Becthel Corp. Blue Hills 2 930 ACP 1983 Engineering, Inc. pressurized-water Bechtel Corp. near Mill Creek, Newton County Texas Utilities Co.2 Comanche Peak 1 1,150 ACP 1980 Westinghouse pressurized-water Brown & Root, Comanche Peak 2 1,150 ACP 1982 Electric Corp. pressurized-water Inc. near Glen Rose, Somervell County Consortium 3 South Texas Project 1,250 ACP 1982 Westinghouse pressurized-water Brown & Root, °' near Palacios, Matagorda County Electric Corp. Inc. Consortium4 Unnamed 1 1,250 planned 1983 unknown unknown unknown Unnamed 2 1,250 planned 1985 unknown unknown unknown Undetermined South Texas location 1ACP = Application for construction permit pending. 2owns all or most common stock of Dallas Power & Light Co., Southwestern Electric Service Co., and Texas Power & Light Co. 3Houston Lighting & Power Co. -30.8%; City Public Service Board (San Antonio) -28.0%; Central Power & Light Co. -25.2%; and City of Austin ­16.0%. 4same four utilities as in Note 3, with the addition of the Lower Colorado River Authority. Shares of ownership undetermined. Sources: Nuclear News Buyers Guide, mid-February 1974, p. 49; company annual reports; press clippings. ~ Compiled by: Center for Energy Studies, The University of Texas at Austin, 1975. ~ *On September 10, 1975, the Allens Creek Nuclear Generating Station was indefinitely deferred. f;J ~ s. ? ':'1:1· ~ [ ~ E q ' MAPI gi ~ s· ~ ~ I ~ i: ;:i '1> ...... -...) MAP II Present and Planned Transmission Lines ( 345 Kilovolts or greater) Present Future ~ ~ ... ~ ~ 5. ? cl' ~ ... ~ E ~ ,'.,..;. Energy in Texas Volume I Coordinated generation-installation schedules, Exchange of capacity and energy, Allocation of spinning reserve, Coordination of maintenance outage schedules , and Investigation of installing economic dispatch facilities (FPC, National Power Survey, 1970). Interconnection of electric-power systems within Texas has long been an established fact. However, the Electric Reliability Council of Texas (ERCOT), which includes TIS, TMPP, and 70 other electric-power companies ( 41 coopera­tives, 27 municipalities, and 2 others), is connected to neither the New Mexico Power Pool (NMPP) nor the South West Power Pool (SWPP). All other major, regional electric­power systems in the U.S. (See Map III) are interconnected for purposes of reliability and economy. ERCOT serves 195,000 square miles, has a load of approximately 20,000 MW, and is designed to withstand: Loss of all generating capacity at any generating station; Outage of any single-or double-circuit transmission line , transformer, or bus; Outage of any circuit during scheduled maintenance of another line; Simultaneous outage of overhead transmission lines parallel to each other for a substantial distance, a spacing between circuits of less than the height of the structures; Any fault cleared by normal operation of backup relays; and • Loss of any large-load or concentrated-load area (Fort Worth Regional Office, FPC, 1972). How Interconnection Would Affect ERCOT Section 202(a) of the Federal Power Act authorizes the Federal Power Commission (FPC) to promote and en­courage voluntary interconnection and the coordination of facilities for the generation, transmission, and sale of electric energy for the purpose of assuring an abundant supply with the greatest possible economy and with regard to the proper utilization and conservation of natural resources (Fort Worth Regional Office, FPC, 1972). The worth of interconnection may be examined by computing the difference in reserve requirements between the isolated operation of ERCOT and its hypothetical interconnection with another system over time, on a present cost basis. To this end, an October, 1972, staff report released by the Fort Worth Regional Office of the FPC, Study of Proposed Interconnection Between the Electric Reliability Council of Texas (ERCOT) and the South West Power Pool (SWPP), recommended that ERCOT interconnect with SWPP at three points (see Map IV). The reasons supporting the recommendation to inter­connect were primarily economic. According to the FPC, the interconnection would cost an estimated $37 million in present value over 10 years, but could result in total savings of $193 million in present value over 10 years, with a net gain of about $156 million. The report, however, did not specify who would incur the costs or how the benefits would be distributed (Table 1-3). ERCOT's reaction to the FPC proposal is not favorable. The objections of Texas utility companies encompass five main areas: (1) reliability, (2) financial considerations, (3) management problems, (4) FPC jurisdiction, and (5) the adequacy of proposed interconnections. Reliability. Of primary concern to utilities is the issue of reliability. In order for all the savings described in the report to be realized, ERCOT must reduce its average system-reserves from 18.6 percent to 15.5 percent. In spite of decreased reserves, the FPC argues that both ERCOT and SWPP could still meet a "one day in 10 years" reliability criterion. (Table 1-4.) The resolution of the reliability issue hinges upon the measure of reliability. Three different measures (or stan · dards) are commonly used: a) maintenance of spining reserves within a range of 15 to 25 percent of annual peak-load; b) maintenance of spinning reserves sufficient to cover forced outage of the largest unit in the system; c) maintenance of reserves adequate to meet the cumula­ tive probabilities that load will exceed capacity because of forced outage on any one day in 10 years. The "one day in 10 years" criterion is based on a computerized simulation of electric-power-system opera· tions. Variables differ among models according to the desired level of sophistication, but all models take into account at least three factors: (i) size of plant (A system composed of larger power plants must maintain higher reserves than one composed of smaller units.) (ii) type of plant (Differing types of plants and individual plants of similar size all have different probability of a forced or scheduled outage. Loss of load models must therefore consider operating probablities of all units in the system.) (iii) probability of demand exceeding capacity (Forced outages cause problems only if they occur when demand (i.e. , load) is high. Loss of load models consider the probability that demand will exceed operating capacity when outages occur.) Other variables employed by more sophisticated approaches include details on weather fluctuations, business cycle variations, scheduled maintenance, functional relationships between forced outages and plant maturity, and trans­ mission reliability. The ERCOT/SWPP interconnection study used a loss-of­ load probability model to simulate operations of both MAIN MAAC MARCA SWPP ERCOT wscc M/\Plll RECIONi\L ELECTRIC RELIABILITY COUNCILS East Central Arca Reliability Coordi­ nation Agreement Mid-America Jntcr­ pool Network Mid-A tlan lie Arca Council Mid-Continent Arca ReLiabilily Coordi­ nation Agreerncnl Northeast Power Coordinating Council Southeastern Flectric Reliability Council Southwest Power Pool Flectric Reliability Council or Texas Western Systems Co­ ordinating Council April I. 1974 r ! ~ f ~ ~ 1----....... ,.............. , ...., ~ ~. ;;· /l KANSAS 1~....... --1 I .y :;;:i .J r--...-­ 1 / -._ -­ '--; ~ 1 / ¢ I ~ '-i.., E" I -L;_,....... / / ii ~ MISSOURI ') ~ ..... I L._ I -­ \ --T I__ --~­ f------­ I OKLAHOM~ ,. _ _._. / r-----, / ......::-11 I : L I I I I I ~ r' I NEW MEXICO I I I I I I I l \ I / ' r---_J / 'I. -....., \ __ _j // I ---"..// ....,... ' '~ I ---~:-~-==-7;)::::".;::-~t'--~ --------~--~~ I I o '\~ I I I _,,.,) I ,... ..... TEXAS / \ > 4.1" _q o=­ c\ { LEGEND \ O Generating Stations \ \ / Transmission Lines ---230KV ------345 KV \Cf /;j7_'11' ----500KV PROPOSED TRANSMISSION LINES Proposed BETWEEN ERCOT AND SWPP ----ERCOT Boundary MAP IV 1975 --SWPP Boundary Source: Fort Worth Regional Office, FPC, 1972 TABLE I-3 Summary of Annual Costs Generation Transmission Net Savings Over Isolated Operation (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) Capacity Capacity Cumulative Present Worth Present Worth Added Added Annual Annual Annual of Annual Present Worth Annual of Annual Isolated Interconnected Capacity Capacity Cost Cost Annual of Annual Savings Savings Year 0Eeration 0Eeration Difference Savin~ Difference !/ Difference 'J./ Cost lJ Costll Col. 5-Col. 7 Col. 6 -Col. 8 (MW) (MW) (MW) (MW) ($1,000) ($1,000) ($1 ,000) ($1,000) ($1,000) ($1,000) 47,257 43,595 1976 5,760 5,920 (160) 3,600 52,956 45,067 8,053 6,853 44,903 38,214 1977 6,480 6,720 (240) 3,360 49,426 38,803 8,053 6,322 41,373 32,481 1978 6,150 7,440 (1,280) 2,080 30,597 22,160 8,053 5,832 22,544 16,328 1979 7,680 8,000 (320) 1,760 25,890 17,298 8,053 5,380 17,837 11,918 1980 9,440 9,120 320 2,080 30,597 18,858 8,053 4,963 22,544 13,895 1975 4,160 400 3,760 3,760 55,310 51 ,024 8,053 7,429 TOTAL 39,680 37,600 2,080 244,776 193,210 48,318 36,779 196,458 156,431 11 Annual cost difference between isolated and interconnected operation is estimated at 14.71 dollars per kilowatt per year including 12.96 dollars per kilowatt per year fixed charges plus 1.75 dollars per kilowatt operation and maintenance cost times the cumulative annual capacity savings (Col. 4). The fixed charges are based on a generating unit investment cost of $90 per KW. l! Present Worth interest rate of 8.4 percent referenced to the year 1975 is assumed. 11 Annual cost is estimated at 15.9 percent (14.46 fixed charges and 1.5% operation and maintenance expense) of the total estimated investment of $50.65 million. N Source: Fort Worth Regional Office, FPC, 1972 TABLE 1-4 Minimum Reserves to Meet I Day/IO Year Risk ERCOT Presently ~ ER COT ERCOT and SWPP Planned ~ Year Isolated Interconnected Difference Reserves t:i (%) (%) (%) (%) ~ (") 3. 1975 18.33 14.86 3.47 21.66 1976 18.49 15.13 3.36 19.76 ?ti 1977 18.17 15.60 2.57 17.68 ~ 1978 17.91 15.54 2.37 18.42 ~ 1979 18.15 15.93 2.22 17.83 1980 20.73 16.13 4.60 18.13 [ ~ Source: Fort Worth Regional Office, FPC, 1972 ~ ,_;.....~ ;.,... Energy in Texas Volume I systems individually and when hypothetically inter­connected. It concluded that both systems could operate with 2,080 MW less generating-capacity over 10 years if they were interconnected than if they were independent (Fort Worth Regional Office, FPC, 1972). Conspicuously absent in the FPC study is an analysis of the loss-of-load risk-index that both systems have independently maintained in the past, and what the savings would be if that same risk-index were extended to the future under independent and interconnected conditions. The "one day in 10 years" standard, while frequently accepted, is still arbitrary. Moreover, assuming the validity of the standard, the probablity that load will exceed operating capacity is always positive; that is, "one day in 10 years" may be tomorrow as easily as 10 years from tomorrow.* The utilities' standards are based on the forced outage of the largest unit, but they do not formally anticipate the possibility that a smaller unit could experience a forced outage at the same time as the largest plant. In practice, however, such coincidental outages are not overlooked. ERCOT engineers maintain excellent communications with each other and utilize automatic equipment that can absorb load losses without a blink of lights throughout the pool. The Texas electric utilities have demonstrated their reliability, with neither a brownout nor a blackout in their operating history. Their standards have proved adequate, and the utilities see no need to change them. FPC engineers agree that reliability has been demon­strated and that several crises have been handled with maximum efficiency and coordination. However, they also indicate that good fortune has played a role. Financial Considerations. Electric-power reliability is maintained by a combination of adequate generation-and transmission-facilities. Interconnection increases the inten­sity of transmission facilities relative to generation invest­ment. Texas utilities indicate that they prefer to invest in *The Regional Office (Ft. Worth) of the Federal Power Commission responded to these observations as follows: 1) We felt that these systems' reliability index over the past years was probably better than one day in ten years as the utilities themselves have suggested. Therefore, to use a higher standard for the purpose of timing in future generating unit additions would result in even greater savings for interconnected operation over that for isolated operation. It was our intention to use a conservative approach throughout the study so that any benefits would not be overstated but would be fully realizable. 2) Any actual historical risk index would fluctuate widely from year to year so that some average wouid have to be used which would not really have much meaning and would complicate understanding the final results. 3) To perform a historical analysis, as was suggested, would have extended the study an additional year and this was not considered justifiable. generation rather than transmission to provide for relia­bility. As a result, utilities' financial resources are ear­marked for increased development of generation capacity. ERCOT maintains transmission facilities within Texas sufficient to carry the Texas electric-power load. System growth will be met by building new generation-capacity, including nuclear plants, and supplementing transmission facilities. "Capacity" is a measure primarily of generation, and additions to capacity must be made by investment in generation. Reserves are an integral part of capacity and cannot be increased by building transmission lines, accord­ing to the u till ties. The FPC discounts these arguments on the grounds that seasonal, weekly, or hourly reserve sharing can effectively add to total capacity by decreasing reserve requirements, and that this can be affected by building transmission facilities that interconnect with SWPP. Further, the FPC points out that investment in generation facilities costs substantially more per unit of productivity than investment in transmission facilities. Management. Management costs, expressed in terms of both money and effectiveness, increase as system size increases. Texas utilities are fearful that management of a pool as large as ERCOT and SWPP combined could not be effective. The FPC disagrees, citing the effective managerial history of the rest of the national electric-power grid. While the historical effectiveness of national grid man­agement is debatable, ERCOT rests its case on its impec­cable record. Effective management of ERCOT has been demonstrated, and intervention in the managerial relation­ships that have developed in Texas could, in the utilities' viewpoint, be disruptive. Definition of maintenance respon­sibilities and emergency-response rates are the utilities' areas of primary concern. FPC Jurisdiction. Interconnection would bring Texas utilities under the regulatory scrutiny of the FPC; this would include the regulation of wholesale prices for interstate transmission as well as financial auditing. Texas utilities confirm that this is undesirable from their point of view, but they do not regard this as a primary concern. The FPC, however, sees this issue as central to the interconnection question. The FPC regards the United States as a cooperative federation of states; it believes Texas electric-power companies should volunteer to aid other states, and, in turn, accept help when Texas is in need. Utility representatives say that their desire for indepen­dence is based upon a fear of the costs involved in coping with the federal bureaucracy. They believe that the state can adequately protect the public interest and that the relatively low rates charged by Texas electric-power utilities preclude the need for regulation. Adequacy of Proposed Interconnections. One utility Texas Electric-Power lndusr;yl spokesman expressed the op1mon that the three inter­connections proposed in the FPC study are not sufficient to carry the load between ER COT and SWPP. He focuses the need for three to four times the proposed transmission­capacity, with additional backup facilities. The FPC's proposal for interconnection is based upon a mid-1960s study of Texas utilities. FPC spokesmen do not believe that conditions have changed so dramatically since then as to require additional transmission facilities. Other Considerations. The FPC study, with an eye to history, further notes that "it is natural to consider interregional ties between ERCOT and SWPP as the next logical step in the evolutionary development of their transmission grids" (Fort Worth Regional Office, FPC, 1972). The eventual ties between TIS and TMPP, which had been advocated much earlier, were effected when mutual benefits outweighed costs. The FPC foresees the day when system expansion will make interconnection a desirable policy for all concerned. In the interim, the FPC believes that the public interest is not being served. It is important to note, however , that retail electricity prices would not necessarily decrease (or increase more slowly) if all economic benefits from interconnection were realized. Retail rates are not under FPC jurisdiction, and dramatically increasing fuel prices can only mean higher electricity bills for ultimate consumers. In general, arguments in favor of an ERCOT-SWPP interconnection conclude that: • Interconnection might facilitate the joint financing of larger, more efficient generating-plants. Interconnection could facilitate the provision of capacity and energy to an electric-power system during maintenance, emergency shutdown, or replace­ment of a system's generating facilities. Interconnection may provide insurance against un­expected natural or man-made disasters. On the other hand, opponents of interconnection argue that: Interconnected systems operating in tandem may allow a local power failure to become a widespread blackout. There is no assurance that large interregional systems will be able to plan for and provide electricity to meet the tremendous growth in demand that is expected. There may be opposition by environmental groups to the large EHV transmission lines characteristic of interconnections. Summary. More than 80 percent of the generating capacity in Texas is coordinated through ERCOT. This electric-power group conducts business only in Texas, and history shows that its electric-power reliability has been excellent. The FPC recommendation that ERCOT interconnect with SWPP is based on possible economic benefits resulting from lower reserve-requirements for a given measure of reliability. Utility objections to the FPC interconnection proposal are based upon differences of opinion regarding reliability, financial considerations, management problems, regulatory jurisdiction, and adequacy of the proposed ties. Given the limits of current knowledge, these differences remain, for the most part, moot questions. Each opinion is logically derived from the relative points of view of the parties directly concerned. Since the proposal is justified on economic grounds, it must also be judged on economic grounds, within a political sphere. In line with its statutory mandate, the FPC notes: While the resulting reserves in this study fall within the generally acceptable range of 1 S to 25 percent of annual peak-load, an actual reduction in reserves is not necessarily being advocated. It is utility manage­ment's prerogative to determine whether to reduce reserves after interconnection to a level which would provide the same reliability or risk as under isolated operation and pass the resultant savings to their customers or to maintain reserves under inter­connected operation as otherwise planned for isolated operation in order to achieve improved power-supply reliability (Fort Worth Regional Office, FPC, 1972). From this comment, it is not clear that interconnection would necessarily decrease capital investment. But even if capital investment were decreased, there is no assurance that the savings would be passed on to consumers. It is probable that the FPC would insure that the savings would be passed on through wholesale transactions, but market competition would have to determine the degree to which the savings would be passed on to the retail customers. It has been shown, however, that the electricity market Energy in Texas Volume I in Texas does not display characteristics which would be associated with a high degree of competition, so it is doubtful that the market would insure lower retail rates as a result of lower capital investment. The only way lower retail rates can be insured uniformly is through state regulation of such rates; and it is unrealistic to anticipate such regulatory action in view of rising capital costs to utilities and increases in the price of boiler fuels. In conclusion , it does not seem that interconnection would necessarily benefit the consumer, and management problems could, in fact, work to the detriment of consumer interests. Therefore, we feel that interconnection between ERCOT and SWPP does not seem to be justifiable at present.* *The Regional Office (Ft. Worth) of the FPC disagrees with this conclusion and notes: Although . . . [your] report states the Texas utilities' position with regard to interconnection, our own report includes written comments from all major companies in both ERCOT and SWPP that wished to comment on the study. It is interesting to note that although the SWPP companies would not benefit from an interconnection with ER COT to the same extent as ERCOT for the reason that SWPP is already realizing benefits from interconnected operation, many of the SWPP companies expressed a willingness to undertake further studies at great cost whenever the ERCOT companies express a similar willingness. REFERENCES 1. Electric Reliability Council of Texas, Response to Federal Power Commission Order No. 383-2 (Docket R-362), April 1, 1972, 1975. 2. Texas Electric Cooperatives, Inc., 1972 Directory Texas Electric and Telephone Cooperatives, 1972. 3. United States Federal Power Commission, Fort Worth Regional Office, Study ofProposed Interconnection between Electric Reliability Council of Texas and South­west Power Pool, Staff Report, October, 1972. 4. , 1970 National Power Survey, U.S. Govern­ment Printing Office, Washington, D.C., 1970. 5. , Statistics ofPrivately Owned Electric Utili­ties in the United States for Year Ended December 31, 1970, Washington, D.C., December, 1973. 6. , Statistics of Publicly Owned Electric Utilities in the United States for Year Ended December 31, 1970, Washington, D.C., February, 1973. 7. , Typical Electric Bills, 1974. 8. United States House of Representatives, Hearings Before the Subcommittee on Communications and Power of the Committee on Interstate and Foreign Commerce, 92nd Congress, 1st session, on HR 5277, HR 6970, and HR 6971, HR 6972, HR 3838, HR 7045, HR 1079, and HR 1486, Bills relating to Powerplant Siting and Environmental Protection, May 4, 6, 7, 11, 12, 13, 25, 26, and 27, 1971, Serial No. 92-32, U.S. Government Printing Office, Washington, 1971, Part 2. 15 CHAPTER TWO ELECTRICITY DEMAND ANALYSES INTRODUCTION Public concern for power reliability reflects a growing awareness of the importance of electricity in today's economy. Power reliability requires planning for an ade­quate supply of power; this, in turn, is greatly influenced by forecasts of electricity demand. To a great extent, demand forecasts determine and justify new technologies of generation as well as new supply alternatives. In this respect, it is quite important that the demand forecasts be done accurately . An underestimation of electrical energy demand may result in brownouts, interrupted service, and increased production costs due to overloading. An overestimation, on the other hand, may lead to under-utilization of equipment, wasteful investment leading to higher operating costs, hasty application of imperfect technology, and consequent environmental damage. This chapter begins with an examination of the process of making future estimates by reviewing projections of national electric-power demand. Next there is an analysis of electric-power production to identify factors associated with increases in power production over time. This is complemented by an attempt to identify regional in­fluences associated with electric-power production, since demand projections made for the United States may be inadequate for anticipating state electric-power require­ments. Finally, there is a forecast of electric-power demand for the State of Texas and the prospects for energy conservation. A REVIEW OF ELECTRICITY-DEMAND STUDIES Numerous studies have attempted to predict national demand for electricity for various periods between 1950 and 2000. Table 11-1 shows the results of several of these studies, with consumption expressed in billions of kilowatt hours (KWH). The values for the first five of these projections, with historical bases, are shown graphically in Figures 11-1 through 11-8, with the average annual percent­age increases in demand also indicated. Reasons for the wide range of reported values are discussed below. Both theoretical and practical problems arise in pre­dicting the demand for electricity. Theoretically, the quantity of electricity consumed is assumed to be available at a given price. Unless demand is perfectly price-inelastic in the relevant range, a change in the price of electricity will effect a change in the quantity consumed. Historical data on electricity consumption do not show this relationship; rather, the data show only the quantity demanded during a period in which the price might be subject to change. Without knowing the precise nature of the present demand-curve-its slope, elasticity, and cross-elasticities with respect to other forms of energy­it is difficult to predict the nature of the demand curve in the future. Yet the studies cited in Table 11-1 attempt to do just that. Most studies accept past consumption of electricity as an indication of historical demand. Implicit in this acceptance is the assumption that price, expressed in constant dollars, has not significantly affected electricity demand over time. This means that the economy has always remained sub­stantially at the same point on the demand curve, though the curve as a whole may have shifted dynamically. The price assumption, while not precisely true, is necessary where there is a lack of data on elasticity which precludes interpolation of the quantity demanded at a truly constant price. If price is assumed to be held constant, elasticity ceases to be a relevant statistic. Further problems arise in predicting electricity demand once theory is brought into contact with practicality. In the studies under review, these problems are basically of three types: (1) those that concern the use of different metho­dologies; (2) those without explicit analytical assumptions; and (3) those that emerge from different data bases. 1. Methodologies. Variations on three basic metho­dologies were found: a. Judgment : The judgment method is the least precise and the least scientific, but it could generate results as accurate as any other ap­proach. Variations in range, however, can be extreme. b. Data Analysis: By analyzing historical elec­ Energy in Texas Volume I TABLE 11-1: FORECASTS OF ELECTRICITY DEMAND (Billions of KWH) SOURCES: aProduction of Electric Energy, Capacity of Generating Plants, Federal Power Commission, monthly between 1951 and 1962; Electric Power Statistics, Federal Power Commission, monthly between 1963 and 1970. Figures for Alaska and Hawaii subtracted from total. b"Report of the National Fuels and Energy Study Group on Assessment of Available Information on Energy in the United States," Committee on Interior and Insular Affairs, United States Senate, 8 7th Congress, 2d Session, S. Doc. 159, September, 1962. c"An Energy Model for the United States Featuring Energy Balances for the Years 1947 to 1965 and Projections and Forecasts to the Years 1980 and 2000," Information Circular 8384, Bureau of Mines, U. S. Department of the Interior, July, 1968. dschurr, Sam H., Bruce C. Netschert, with Vero Eliasberg, Joseph Lerner, and Hans H. Landsberg, Energy in the American Economy, 1850-1975: An Economic Study ofIts History and Prospects, Johns Hopkins Press, Baltimore, 1960. eLandsberg, Hans H., Leonard L. Fischman, and Joseph L. Fisher, Resources in America's Future: Patterns ofRequirements and Availa· bilities, 1960-2000, Resources for the Future, Inc., Johns Hopkins Press, Baltimore, 1963. fThe 1970 National Power Survey, Federal Power Commission, U. S. Government Printing Office, 1970, vol. 1, Appendices A and B. g"Civilian Nuclear Power -A Report to the President," U.S. Atomic Energy Commission, 1962 (and 1967 Supplement). h"Competition and Growth in American Energy Market, 1947-1985," Texas Eastern Transmission Corporation, 1968. ivogely, William A., "Patterns of Energy Consumption in the U.S.," Division of Economic Analysis, Bureau of Mines, U.S. Department of the Interior, 196 2. kook, Michael C., "Energy in the United States, 1960-1985," Sortorius & Co., September, 1967 . 17 Electridty-Demand Analyses TABLE II-1 (cont.): FORECASTS OF ELECI'RICITY DEMAND (Billions of KWH) SOURCES: kRobert R. Nathan Associates, Inc., "Projection of the Consumption of Commodities ProdUCJ"ble on the Public Lands of the United States 1980-2000," prepared for the Public Land Law Review Commission, Washington, D.C., May, 1968. 1'"The Outlook for Key Commodities," Report ofthe Prerident's Materials Policy Commission, vol II, Government Priniting Office, June, 1952. tni"eitelbaum, P. D., "Nuclear Energy and the U.S. Fuel Economy, 1955-1980," National Planning Association, Washington, D. C., 1958. nLamb, G. A., in hearings before the Subcommittee on Automation and Energy Resources of the Joint Economic Committee, 86th Congress, 1st Session, October 12-16, 1959, pp. 215-225. 0 Sporn, Philip, direct communication to authors of "Report of the National Fuels and Energy Study Group," op. dt., cited, p. 36. PEdison Electric Institute, "Water Resources Activities of the United States," Report of the Select Committee on National Water Re­sources, U.S. Senate, Committee Print No. 10, 1960. qFederal Power Commission, letter of November 28, 1961, to authors of "Report of the National Fuels and Energy Study Group," op. dt., cited, p. 36. rElectrical World, 4th Annual Survey, 1962. 5The 1964 National Power Survey, Federal Power Commission, U.S. Government Printing Office, 1964. Energy in Texas Volume I FIGURE 11-1 HISTORICAL PRODUCTION OF ELECTRICITY; 48 CONTIGUOUS STATES (EXCLUDING IMPORTS) KWH ( x1()6) 1800 200 0 1951 1955 1960 1965 1970 1975 1980 TIME 19 tricity consumption using the least-squares criterion, a curve-fitting prediction of the growth of consumption (and hence, demand) can be found. All assumptions are implicitly static in such a model; the result is only a function of the data base. c. Causal Analysis: Causal analysis assumes that an array of factors causes demand to change over time. It thus reduces demand to its com­ponents, and predicts the value of the com­ponents individually, using any appropriate method. The summed and weighted changes over time, plus a constant, give total demand. The weights are determined by the statistical relationships between historical consumption (the dependent variable) and the demand com­ponents (independent variables). 2. Assumptions: Judgment and data analysis, as noted, assume that the causal factors of demand will change at the same rates in the future as they have in the past . Such an assumption is tantamount to saying that no parameters will change with respect to each other. On the other hand, causal analysis requires explicit assumptions as to the change over time of the independent variables. In predicting the demand for electricity, six categories of such assumptions were used in the studies citied in Table 11-1: a. Gross National Product (GNP) growth: Most studies assume the GNP will increase at the rate of 4 percent per year, but the growth rates in those studies examined ranged from 3 to 5. l percent per year (real growth) . b. Population growth: Most studies accept the U.S. Census Bureau's projection of 1.6 percent per year, though the range is from 1 .3 to almost 1.9 percent per year growth. c. Relative pricing of fuels: Most studies assume that prices will remain about the same, rela­tively. Yet by using judgment to predict re­serves of various fuels, some studies project future shortages at present rates of consump­tion with the relative changes in prices that will result. Assumptions of the sizes of reserves add additional constraints to model builders and influence their results. d. Technology: Most projections, especially those not extending beyond 1975, assume no signifi­cant changes in technology. Others use varying assumptions of evolutionary and revolutionary technological changes in different cases. Evolu­tionary changes frequently concern efficiency rates, while revolutionary assumptions might include fusion or magnetohydrodynamics. e. Business cy cles : All studies assume no long­term cyclical changes in economic activity. f. National defense: "Cold war" defense relation­ships are generally assumed , and little change in Electricity-Demand Analyies the budgetary proportion of defense spending from the 1960s is projected. Most of these studies were made before the Vietnam escala­tion. Some case approaches, however, vary this assumption significantly. 3. Data Bases: Contrary to what might be thought, defini­tions of the amount of electricity consumed historically vary widely. Some studies examine only electricity generated by utilities. Others expand this definition to include electricity generated by industry for its own con­sumption. Some include imports of electricity, while others do not. Even the estimates of the amount of im­ported electricity vary, and some studies differ in the conversion factor between KWH and British thermal units {BTU). Comparison ofStudies Five predictions of the demand for electricity were closely examined. Their methodologies, assumptions, and data bases are compared below; their results are plotted in Figure 11-8. National Fuels and Energy Study Group. The judgment method is used in this study. Citing seven previous estimates, this study eliminates the most extreme of the seven and accepts an approximation of the central tendency of the remaining five, as shown in Figure 11-2. The authors do not identify the two extreme values, however; one extreme value is obvious {Paley), but if the study next farthest from the reported value is eliminated (Schurr and Netschert), then the reported value is lower than any measure of central tendency. If the FPC estimate is eliminated instead, the reported value becomes more in line with the five studies being compared, but the FPC projection is less extreme, relatively, than that of Schurr and Netschert. As noted above, the judgment method assumes the validity of the assumptions of the studies from which it is derived. The specific methodologies, assumptions, and data bases of the seven studies cited by this group are not determinable, however. (National Fuels and Energy Study Group, 1962) U.S. Bureau of Mines. This report uses causal analysis, relating "projected trends of a number of relevant deter­mining variables" to the historical consumption of electricity produced by utilities, excluding imports, from a base year of 1965 {see Figure 11-3). Many of the "relevant deter­mining variables," or components of demand, are reason­ably straightforward, e.g., economic activity levels, popula­tion, industrial production; and the assumptions concerning changes in these variables are not radical. Others are somewhat less quantifiable, e.g., environmental restrictions, political energy-policy considerations and trade-offs. Energy demand is also divided into fuel-source demand­ Energy in Texas Volume I FIGURE 11-2 NATIONAL FUELS AND ENERGY STUDY GROUP ESTIMATE OF (TOTAL) DEMAND FOR ELECTRICITY ( BASE YEAR, 1960 ) ALSO SHOWN ARE METHODOLOGICAL COMPARISON STUDIES AVG. ANNUAL PERCENT INCREASE= 11.0 FPC Edison Elec. Inst. Lamb ( 1959 ); Sporn ( 1961 ) Tex. East. Trns. Corp. 300 0 1951 1955 1960 1965 1970 1975 1980 TIME 21 Electricity-Demand Analyses FIGURE 11-3 U.S. BUREAU OF MINES ESTIMATE OF DEMAND FOR (UTILITY) ELECTRICITY (BASE YEAR, 1965) DIFFERENCE IN ACTUAL V. REPORTED VALUES DUE TO B.T.U. TO KWH CONVERSION FACTOR NUMBERS REPRESENT AVG. ANNUAL PERCENT INCREASE 3000 2700 2400 2100 1800 1500 1200 900 600 300 0 1951 1955 1960 1965 1970 1975 1980 TIME 22 Energy in Texas Volume I components, market demand-sectors, and fuel-consumption demand-determinants. Thus, by splitting demand into various parts, the Bureau of Mines is able to provide cross-checks on its results. (Bureau of Mines, 1968) Schurr & Netschert. This study identifies major sectors of consumer demand and extrapolates changes in the demand sectors, as shown in Figure 11-4. By proportion­ately summing these demands, total energy consumption is predicted. Growth assumptions are generally conservative, especially with respect to technology, but this is due primarily to the short scope of the study. Two projections of demand are reported, one for utility production and one for total electricity production. (Schurr & Netschert, 1960) Landsberg. This study also uses causal analysis, extrapo­lating past trends of the independent variables which determine energy demand, e.g., population, GNP, size of the labor force. Varying assumptions of the future state of technology are made, and different cases are reported as being associated with different predictions about tech­nology. Again, two projections are reported for two data bases; these are illustrated in Figures 11-5 and 11-6. (Landsberg, Fischman, Fisher, 1963) 1970 National Power Survey . In this study, the Federal Power Commission groups the 48 contiguous states into regions and uses causal analysis to project electricity demand in each region (Figure 11-7). By summing these regional projections vertically, a national projection of demand is determined. Considerable attention is given to the residential sector, and for this, a total of eight predictions is found. The study uses two formulae, two GNP growth assumptions, and two ratios of the price of electricity to the price of gas in projecting residential demand. The projections are generally higher when the number (and size) of households is used in place of population as a parameter (the second formula). (Federal Power Commission, 1970) Summary To this point we have reviewed a number of attempts to project electricity demand. In the short run, the projections closely approximate each other. However, after 1980 they start to vary widely. Differences in projections are attrib­ utable to differences in methodologies, assumptions, and data bases. Thus, for short-term (5 to 10 year) planning, any of these studies could be used. For long-range planning, however, it is necessary · to question the methodology and assumptions of each study. Perhaps projections based on judgment or historical data analysis alone may not suffice, and additional analysis may be required to identify factors that influence electricity demand, both nationally and regionally. ANALYSIS OF NATI ON AL ELECTRICITY PRODUCTION Time-Series Analysis Our interest in the analysis of national electrical energy production is not to project it as such, but rather to identify those factors closely associated with it. "Closely associated" does not imply a causal analysis. The causes underlying electrical energy consumption, especially resi­dential consumption, include many social and behavioral factors that are difficult to identify. Moreover, we define "closely associated" factors as those aspects of society that have varied over time in a functional relationship with electricity production. We do not need to know why the relationship holds true, only that changes in one factor are accompanied by changes in another. The first step in developing such an analysis was to identify as many items as possible that might be associated with electricity production, limiting the list only by the availability of data. These items were selected: population, families and unrelated individuals, industrial employment, service employment, total employment, personal consump­tion, durable goods, residential investment, total service GNP, total goods GNP, and total GNP. The time period 1950-1970 was chosen as being work­able in terms of data collection and long enough to be representative of any trends that might exist. Moreover, we were forced to deal with the 48 con­tiguous states due to the recent statehood of Alaska and Hawaii and the subsequent discontinuity in the historical records. The figures for employment were originally listed under more specific headings, and for this reason it was necessary to group mining, construction, and manufactur­ing under the category "industrial employment". A similar grouping was made for "service employment", including services, finance, real estate, wholesale and retail trade, transportation, and similar classifications. The last task was to gather figures on electric-power production, and this added unexpected complications. First, production figures do not take into account imports and exports of electricity, which are apparently common­place along the Canadian border. However, the only figures available for imports and exports were estimates, and there was such disparity among them that it seemed most advantageous to work without them. Another consideration was the distinction between utility and industrial or private production of electricity. Since private generation of electricty may be the result of such factors as historical accident, local efficiency or reliability, or simply the absence of a local utility, the distinction seemed to be purely artificial, and hence the figures chosen were the sum Electricity-Demand Analyses FIGURE 11-4 SCHURR & NETSCHERT ESTIMATES OF DEMAND FOR ELECTRICITY ( BASE YEAR, 1955 ) NUMBERS REPRESENT AVG. ANNUAL PERCENT INCREASE KWH ( x1()6) 2000 , ,'~DemandPrnjoction• 1800 , I 10.6,tI I ' o................,........~... .., ........................., 1951 1955 1960 1965 1970 1975 1980 1985 TIME 24 Energy in Texas Volume I FIGURE 11·5 LANDSBERG ESTIMATES OF (TOTAL) DEMAND FOR ELECTRICITY ( BASE YEAR, 1960 · INCLUDES IMPORTS ) DIFFERENT ESTIMATES REPRESENT DIFFERENT ASSUMPTION SETS NUMBERS REPRESENT AVG. ANNUAL PERCENT INCREASE KWH ( x 106 I 8000 7000 High Estimate 6000 5000 4000 4.55 3000 e 3.19 2000 Low Estimate 04.25 0 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 TIME Electricity-Demand Analy&e! FIGURE 11-6 LANDSBERG ESTIMATES OF DEMAND FOR (UTILITY) ELECTRICITY ( BASE YEAR , 1960 ) DIFFERENT ESTIMATES REPRESENT DIFFERENT ASSUMPTION SETS NUMBERS REPRESENT AVG. PERCENT INCREASE KWH ( X106) 8000 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 TIME Energy in Texas Volume I KWH ( x 106) 6000 5000 4000 3000 2000 1000 0 FIGURE 11-7 1970 NATIONAL POWER SURVEY ESTIMATES OF DEMAND FOR ELECTRICITY ( BASE YEAR, 1965 ) NUMBERS REPRESENT AVG. ANNUAL PERCENT INCREASE '1' '1 1,'1 '1 /1 11 I/ I/ '1 ,'1 5.1A' 1, /1 5.96 Total \/,J1 J ' Consumption Projections / j / / / / /" ~ \ ~/~ / / / / 11..17&' / / / / 12.74 / / / / / / / /. Actual / Total '/ ,c:.._ Actual Utilities Consumption Utilities Consumption Projections 1956 1960 1965 1970 1975 1980 1985 1990 TIME 27 KWH (X1Q6) 5000 4000 3000 2000 1000 Electricity-Demand Analyse& FIGURE 11-8 COMPARISON OF FIVE. PREDICTIONS OF DEMAND FOR ELECTRICITY ...• / . ..... .. / .·· ... •' .... I .·· ..· ..·· .·· .· ..· ./ / ...•·· ,....··.. . .. •· & .•.. .../ ,.........,,,. ..... / .,,,. / ... .·/-'./. ...... ~_....,,, ..... ~· ..;:::;;-.... .,,,,,. .,..,....... ('t;::::·.,,.••••• """".. .,,~· ~·~1<.·.-::·· --··;;.--~-<-· .,,,-/ •••r.;., ~··· 1951 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 LEGEND: Actual Total Production ___ Naitonal Fuels and Energy Study Group ----­ U. S. Bureau of Mines -• -• - Schurr& Netschert ··-•• -·· Landsberg .... . .. .. National Power Survey, 1970 Energy in T~as Volume I of both utility and industrial generation. A multiple linear-correlation analysis was used, and from a series of relevant variables the equation was reduced to one having the three primary variables noted below (see Appendix A)• X1 = ·1.78x109 + 26452 X3 + 22029 X5 + 1213456 X7 or, X1 .3807 X3 + .3578 X5 + .2636 X7 (normal­ ized) where X 1 is electricity production (thousands of KWH); X3 is families and unrelated individuals (thou­ sands); X5 is service employment (thousands); X7 is personal consumption (billions of dollars). Simply stated, the normalized equation shows the relative effect that each variable has on electricity produc­tion. It can be seen that each of the three variables is approximately of equal importance, with each accounting for about one-third of the result. The multiple correlation value for this equation is .9996, which means that the straight-line analysis almost perfectly describes the actual historical trends, and hence there is no need to attempt to "it a different curve. This equation can be used to predict future electricity production for the nation by substituting projected values for the three independent variables (families, service em­ployment, and personal consumption). The assumption is that the relationship will hold true for the future as they have for the past 20 years. Of course, the accuracy of the prediction will only be as good as the accuracy of the projections for the independent variables. This analytical model could be employed to forecast national electric-power production. However, a more im­portant aspect of the analysis is the identification of three factors closely associated with national production.* Com­paring these factors with factors associated with regional electric-power production may help explain whether national growth is necessarily related to the same factors as regional growth. Regional Analysis Once a set of factors was determined that could be associated with national electricity production over time , an effort was made to see whether individual factors might also be associated in a geographical sense. In other words, if the nation were broken into smaller regions, such as states, would the same factors apply to each of the regions separately? An attempt was made to gather data for each of the 48 contiguous states for as many of the previous factors as possible. Since state figures analogous to GNP were not available because imports and exports for each state are too cumbersome to compute, value added by manufacture was substituted as the best approximation. In addition, the number of households was selected as a close approxima­tion for families and unrelated individuals, which was not broken down by state (actual difference for 1968: 6 percent). The most recent year for which data were readily available was 1969, and using this as the base year we compiled state figures for population, households, in­dustrial employment, service employment, total employ­ment, personal. income, value added by manufacture, and total electricity production by utilities and industry. Maps Il-1 and Il-2 illustrate electric-power production levels in the various states. *On the assumption that past production is a lagged function of consumption, this analysis can be seen as a description of the relevant components of the demand for electric-power production. 29 MAP 11·1 coNTlGUOUS STATE POWER PRODUCTtON TOTAL ( 1969) VJ 0 Less than 10,000 w 10,000 to 29,999 3. !l, ~ 30,000 to i' l 50,000 to 69,999 :... \ 70,000 to 89,999 Source: E Jectric Power Statistics. Jan-Dec 1969. Federal Power Commission. More than 90,000 ( 103 MWH·· megawam hn.) MAP 11-2 CONTIGUOUS STATE POWER PRODUCTION PER CAPITA ( 1969.) s· ~ ~ ~ ~ ~ ...... w LEGEND in KW-H Less than 5,000 5,000 to 6,999 7,000 to 8,999 9,000 to 10,999 Source: Electric Power Statistics and Population Statistics from the 1970 Census. Jan-Dec 1969, Federal Power Commission. Electricity-Demand Analyse~ Again, using a multiple linear-correlation analysis, we arrived at the following equation for state electrical energy production (see Appendix A) : X1 5.56 x 106 + 19182 X3 + 136 X8 or, X1 .8550 X3 + .0346 X8 (normalized) where X1 is electricity production (thousands of KWH); X3 is households (thousands); X8 is value added by manufacture (millions of dollars). The multiple correlation value for this equation was .8877 (compared to .9996 for the time series) which, when the residuals are mapped, suggests that the relationships are not linear. In addition, the number of households accounts for about 85 percent of the result, while value added by manufacture only accounts for about 3 percent. The remaining 11 percent or so cannot be accounted for by a linear combination of the variables selected. This analysis, in addition to providing a descriptive model, has demonstrated that the factors associated with national electricity demand are not the same as those associated with regional electricity demand. This implies that the national energy crisis may not necessarily be shared by all regions; some states may not experience the crisis, whereas others may be severely affected. Since the national rate of growth of electricity demand cannot be used for a particular state it is thus necessary to forecast electricity demand specifically for Texas. ELECTRICITY-DEMAND PROJECTIONS FOR TEXAS Electricity continues to be a relatively inexpensive and readily available commodity. Since World War II the cost of electricity has declined relative to overall price indices. This relative stability in electricity prices and the general "double-every-ten years" trend of electricity demand have resulted in many projections based on the assumption that price can be considered to be independent of demand. Most of these projections (e.g., FPC demand estimates) are based, at least implicitly, on extrapolations of previous trends in overall economic and population growth, not on any detailed model based on changes in these and other variables that affect the demand for electric power. Needless to say, these estimates are likely to be accurate only to the extent that these trends continue essentially unchanged into the future. General observations reveal, however, that population and economic trends are changing. In 1974, for example, average electricity prices increased relative to overall price indices. Many analysts believe the factors influencing the demand for electricity are themselves departing from long established patterns; they believe that higher electricity prices will slow the growth in the use of electricity. A two-year study of the demand for electricity by Chapman, Mount, and Tyrrell evaluated the relations between vari­ables that might influence the growth of demand for electricity, region by region, for each class of consumer­residen tial, commercial, and industrial. (Chapman, et al., 1972) This study suggested that the most important determinant of growth in electricity use for all types of consumers is the price of electricity, followed by popula­tion growth, personal income, and the price of natural gas. It was decided to use the Chapman model to estimate demand for electricity in Texas for the next 20 years. The causal factors taken into account included: the quantity of electricity consumed in the previous time-period, the price of electricity, the price of natural gas, per capita income, and population. The economic concept of elasticity was used to describe the magnitude of the causal factors. Independent estimates of Texas population, income, prices, and elasticities were utilized, with additional projections developed for alternative assumptions of population, elec­tricity, and natural gas prices (Appendix B.). Table 11-2 provides an overall picture of the structure of the demand estimates as well as the sources used as the basis for the projections. Tables 11-3 and 11-4 summarize the demand data in both GKWH and index values. Appendix B describes the methodology as well as the values and the units of all the variables and elasticities. The analysis and forecasts indicate that if the prices increase over the next decades, the demand for electricity is not likely to increase as much as it did in the past. Indeed, the growth rate of total electricity demand for the nation from 1970 to 1971 was below the 7.2 percent annual increase on whic~ the "double-every-ten-years" demand projection by the FPC is based. A significant fraction of this growth reduction is probably caused by changes in the causal variables discussed above. It is obvious from this analysis that the "high" or "low" projections of population do not make a significant difference in the projected demand of electricity in Texas over the next 20 years. Thus a fertility-rate increase or decrease would not significantly .affect demand. Price variations, on the other hand, appear to be a crucial factor in determining future demand for electricity in Texas. A constant price of electricity (in current dollars) will result in a 13 times greater demand for electricity in the next 20 years. However, the FPC price estimates will result in a 1990 demand 8 times the 1970 demand, while "double-by-2000" price estimates will make the 1990 demand only 2.2 times by the 1970 level. The possible doubling of the price of electricity may be caused by fuel scarcities, the rising cost of power plants, pressure to incorporate the social and environmental costs of electricity Energy in Texas Volume I Table II-2 TEXAS ELECTRICITY-DEMAND ESTIMATES (trillions of KWH) Case Asumptions Concerning Population (I) Electricity Natural Gas Price Price Al High Constant2 Constants A2 Med. Increase4 4 A3 Large " Bl High Federal Constants B2 Power Med. Increase4 4 B3 Commission3 Large " Cl High Double Constants C2 by Med. Increase4 4 C3 2000 Large " DI Low Constant2 Constants 02 Med. Increase4 4 03 " Large " EI Low Federal Constants E2 Power Med. Increase4 E3 Commission3 Large " 4 Fl Low Double4 Constants F2 " by Med. Increase4 4 F3 2000 Large " *Electricity sales to ultimate consumers Electricity Demand in 1970 197S 1980 198S 1990 (trillions of KWH) 96.13S 167.417 309.837 613.701 1,341.479 " 309.77S 680.942 1,633.274 343.717 794.080 2,149.S42 96.13S IS8.I80 263.479 4S0.428 818.734 263.478 499.780 996.837 " 292.347 S82.823 l,311.97S 96.13S 134.4SS 169.212 200.SS6 236.88S 169.211 222.S31 288.426 " 187.7S2 2S9.Sl3 379.643 96.13S 16S.43S 296.239 S63.278 1,162.939 " " 296.242 624.99S l,41S.90S 328.701 728.839 1,863.487 96.13S IS6.308 2Sl.92S 413.473 409.983 " " 161.808 204.343 2S0.31 S " 179.S37 238.303 329.482 96.13S 132.86S 161.808 184.16S 20S.S83 161.808 204.343 2S0.31S " l 79.S37 238.303 329.482 (I) Population Research Center, The University of Texas at Austin (refer to Appendix B) (2) The 1970 price of electricity is maintained up to 1990 (3) Federal Power Commission estimates (refer to Appendix B) (4) Lyndon B. Johnson School of Public Affairs, The University of Texas at Austin, 197S (refer to Appendix A) (5) National Petroleum Council Electricity-Demand Analyiei TABLE ll-3 Texas Electricity-Demand Projections (in GKWH) A -High Population Projection and Constant Electricity Price Assumption Consumer 1970 1975 1980 1985 1990 Gas Price: 1) Constant Increase Residential Commerical Industrial Total 32.8353 20.2349 40.7672 96.1353 58.5071 33.3748 71.5339 167.4180 107.4184 60.9457 134.0066 309.8371 203.0046 123.9864 272.0405 613.7017 391.4742 292.5255 625.4118 1,341.4790 Gas Price: 2)Medium Increase Residential Commerical Industrial Total 32.8353 20.2349 40.7672 96.1353 58.5071 33.3748 71.5339 167.4180 107.4184 60.9457 134.0066 309.7749 225.2477 137.5715 301.8474 680.9424 476.9753 356.0449 761.2146 1,633.2737 Gas Price: 3) large Increase Residential Commercial Industrial Total 32.8353 20.2349 40.7672 96.1353 58.5071 33.3748 71.5339 167.4180 119.1882 67.6235 148.6896 343.7168 262.8528 1603722 351 .8750 794.0801 628.8315 468.2424 1,001.0898 2,149.5425 B -High Population Projection and FPC Electricity Price Assumption Consumer 1970 1975 1980 1985 1990 Gas Price: 1) Constant Residential Commercial Industrial Total 32.8353 20.2349 40.7672 96.1353 55.5613 31 .4435 67.3944 158.1803 92.6552 51.4179 113.1077 263.4792 153.0797 89.7217 1%.8597 450.4284 249.7624 175.0812 3743189 818.7340 Gas Price: 2)Medium Increase Residential Commercial Industrial Total 32.8353 20.2349 40.7672 96.1353 55.5613 31.4435 67.3977 158.1803 92.6552 51.4179 113.1077 263.4783 169.8526 99.5525 218.4295 499.7803 3043125 213.0987 455.5991 9%3867 Gas Price: 3) large Increase Residential Commercial Industrial Total 32.8353 20.2349 40.7672 96.1353 55.5613 31.4435 67.3944 158.1803 102.8074 57.0517 125.5009 2923474 198.2095 116.0520 254.6314 582.8232 401.1915 280.2505 599.1682 1,311.9751 Energy in Texas Volume I TABLE 11-3 (continued) C -High Population Projection and Double-by-2000 Electricity Price Assumption Consumer 1970 1975 1980 1985 1990 Gas Price: 1) Constant Residential Commercial Industrial Total 32.8353 20.2349 40.7672 96.1353 47.9182 26.5076 56.8152 134.4551 61.8281 32.2956 71 .0430 169.2117 73.0192 38.4278 84.3150 200.5562 80.4529 48.0469 102.7230 236.8854 Gas Price: 2)Medium Increase Residential Commercial Industrial Total 32.8353 20.2349 40.7672 96.1353 47.9182 26.5076 56.8152 134.4551 61.8281 32.2956 71.0430 169.2112 81.0199 42.6383 93 .5533 222.5305 98.0245 58.4799 125 .0285 288.4265 Gas Price: 3) Large Increase Residential Commercial Industrial To.tal 32.8353 20.2349 40.7672 96.1353 47.9182 26.5076 56.8152 134.4551 68.6026 35.8342 78.8271 187.7516 94.5461 49.7051 109.0586 259.5127 129.2329 76.9082 164.4276 379.6428 D ­ Low Population Projection and Constant Electricity Price Assumption Consumer 1970 1975 1980 1985 1990 Gas Price: Residential 32.8353 57.8881 103.1942 188.0253 344.7046 1) Constant Commercial 20.2349 32.9827 58.2955 113.9265 254.3027 Industrial 40.7672 70.6100 127.6679 247.8617 536.1323 Total 96.1353 165.4354 296.2390 563.2783 1,162.9392 Gas Price : Residential 32.8353 57.8881 103.1942 208.6271 419.9910 2)Medium Commercial 20.2349 32.9827 58.2995 126.4094 309.5225 Increase Industrial 40.7672 70.6100 127.6679 275.0198 652.5488 Total 96.1353 165 .4354 296.2422 624.9949 1,415.9053 Gas Price Residential 32.8353 57.8881 114.5011 243.4574 553.7048 3) Large Commercial 20.2349 32.9827 64.6873 147.3601 407.0596 Increase Industrial 40.7672 70.6100 141 .6564 320.6006 858.1812 Total 96.1353 165.4354 328.7012 728.8386 1,863.4868 Electricity-Demand Analyses TABLE II-3 (continued) E -Low Population Projection and FPC Electricity Price Assumption Consumer 1970 1975 1980 1985 1990 Gas Price : 1) Constant Residential Commercial Industrial Total 32.8353 20.2349 40.7672 96.1353 54.9734 31.0940 66.5239 156.3078 89.0116 49.1820 107.7094 251.9251 141.7843 82.4419 179.3629 413.4730 219.9231 152.2042 320.8837 709.9829 Gas Price: 2) Medium Increase Residential Commerc'ial Industrial Total 32.8353 20.2349 40.7672 96.1353 54.9734 31 .0940 66.5239 156.3078 59.3967 30.8913 67.6523 161.8078 75.0415 39.1788 85.2383 204.3428 86.3135 50.8386 107.1802 250.3153 Gas Price: 3) Large Increase Residential Commercial Industrial Total 32.8353 20.2349 40.7672 96.1353 54.9734 31 .0940 66.5239 156.3078 65.9048 34.2760 75 .0649 179.5370 . 87.5697 45.6721 99.3655 238.3033 113.7934 66.8589 140.9550 329.4824 F ­ Low Population Projection and Double-by-2000 Electricity Price Assumption Consumer 1970 1975 1980 1985 1990 Gas Price: Residential 32.8353 47.4112 59.3967 67.6312 70.8412 1) Constant Commercial 20.2349 26.1962 30.8913 35.3099 41.7688 Industrial 40.7672 56 .0813 67.6523 76.8211 88.0589 Total 96.1353 132.8648 161.8083 184.1646 205.5833 Gas Price : Residential 32.8353 47.4112 59.3967 75.0415 86.3135 2)Medium Commercial 20.2349 26.1962 30.8913 39.1788 50.8386 Increase Industrial 40.7672 56.0813 67.6523 85.2383 107.1802 Total 96.1353 132.8648 161.8078 204.3428 250.3153 Gas Price: Residential 32.8353 47.4112 65.9048 87.5697 113.7934 3) Large Commercial 20.2349 26.1962 34.2760 45.6721 66.8589 Increase Industrial 40.7672 56.0813 75.0649 99.3655 140.9550 Total 96.1353 132.8648 179.5370 238.3033 329.4824 Energy in Texas Volume I TABLEil-4 Index of Texas Electricity-Demand Projections (Using 1970 = 1.000 as the base year.) A ­High Population Projection and Constant Electricity Price Assumption Consumer 1970 1975 1980 1985 1990 Gas Price: 1) Constant Residential Commercial Industrial Total 1.000 1.000 l.000 l .000 1.782 l.649 1.755 l.741 3.271 3.012 3.289 3.223 6.183 6.127 6.673 6.384 11.922 14.457 15.341 13.954 Gas Price : 2)Medium Increase Residential Commercial Industrial Total l.000 1.000 1.000 1.000 l.782 1.649 l.755 1.741 3.271 1.856 4.081 3.222 l l .132 6.799 14.917 7.083 11 .700 8.734 18.672 16.989 Gas Price: 3) Large Increase Residential Commercial Industrial Total 1.000 1.000 1.000 1.000 1.782 1.649 l.755 1.741 3.630 2.059 4.528 3.575 12.990 7.926 17.390 8.260 15.425 11.485 24.556 22.359 B ­High Population Projections and FPC Electricity Price Assumption Gas Price: I) Constant Gas Price: 2)Medium Increase Gas Price : 3) Large Increase Consumer Residential Commercial Industrial Total Residential Commercial Industrial Total Residential Commercial Industrial Total 1970 1.000 1.000 1.000 l.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1975 1.693 l.554 1.653 1.645 1.693 1.554 1.653 1.645 1.693 1.554 1.653 1.645 1980 2.822 2.541 2.774 2.741 2.822 1.566 3.445 2.741 3.131 l.738 3.822 3.041 1985 1990 4.662 7.607 4.434 8.652 4.829 9.182 4.685 8.516 8.394 7.464 4.920 5.227 10.795 11.175 5.199 10.369 9.795 9.841 5.735 6.874 12.584 14.697 6.063 13 .647 ~ Electricity-Demand Ana/yld ·~ TABLE 11-4 {continued) C -High Population Projection and Double-by-2000 Electricity Price Assumption Consumer 1970 1975 1980 1985 1990 Gas Price: l) Constant Residential Commercial Industrial Total 1.000 1.000 1.000 1.000 1.459 l.310 1394 1.399 1.883 1.596 1.743 l.760 2.224 1.899 2.068 2.086 2.450 2374 2.520 2.464 Gas Price: 2)Medium Increase Residential Commercial Industrial Total 1.000 1.000 1.000 1.000 1.459 l.310 1.394 1.399 1.883 0.984 2.164 1.760 4.004 2.107 4.623 2315 2.404 1.435 3.067 3.000 Gas Price : 3) Large Increase Residential Commercial Industrial Total 1.000 1.000 1.000 1.000 l.459 l.310 1.394 1399 2.089 1.091 2.401 l.953 4.672 2.456 5390 2.699 3.170 1.887 4.033 3.949 D ­ Low Population Projection and Constant Electricity Price Assumption Consumer 1970 1975 1980 1985 1990 Gas Price: Residential 1.000 l.763 3.143 5.726 10.498 1) Constant Commerciai 1.000 1.630 2.881 5.630 12.568 Industrial 1.000 1.732 3.132 6.080 13.151 Total 1.000 1.721 3.081 5.859 12.097 Gas Price: Residential 1.000 1.763 3.143 10.310 10302 2)Medium Commercial 1.000 1.630 1.776 6.247 7.592 ­ Increase Industrial 1.000 1.732 3.888 13.591 16.006 Total 1.000 l.721 3.082 6.501 14.728 Gas Price: Residential 1.000 1.763 3.487 12.032 13.582 3) Large Commercial 1.000 1.630 1.970 7.238 9.935 Increase Industrial 1.000 1.732 4314 15.844 21.050 Total 1.000 1.721 3.419 7.581 19384 Energy in Texas Volume I TABLE II-4 (continued) E -Low Population Projection and FPC Electricity Price Assumption Consumer 1970 1975 1980 1985 1990 Gas Price: 1) Constant Residential Commercial Industrial Total 1.000 1.000 1.000 1.000 1.674 1.536 1.632 1.626 2.711 2.431 2.642 2.621 4.318 4.074 4.400 4.301 6.698 7.522 7.871 7.385 Gas Price : 2)Medium Increase Residential Commercial Industrial Total 1.000 1.000 1.000 1.000 1.674 1.536 1.632 1.626 2,711 1.498 3.280 2.621 7.775 4.521 9.835 4.772 6.593 4.544 9.580 8.992 Gas Price: 3) Large Increase Residential Commercial Industrial Total 1.000 1.000 1.000 1.000 1.674 1.536 1.632 1.626 3.008 1.662 3.6397 2.908 9.073 5.270 11.465 5.565 8.665 5.976 12.599 11.835 F -Low Population Projection and Double-by-2000 Electricity Price Assumption Consumer 1970 1975 1980 1985 1990 Gas Price: 1) Constant Residential Commercial Industrial Total 1.000 1.000 1.000 1.000 1.444 1.295 1.376 1.382 1.809 1.527 1.659 1.683 2.060 1.745 1.884 1.916 2.157 2.064 2.160 2.138 Gas Price: 2)Medium Increase Residential Commercial Industrial Total 1.000 1.000 1.000 1.000 1.444 1.295 1.376 1.382 1.809 0.941 2.060 1.683 3.709 1.936 4.212 2.126 2.117 1.247 2.629 2.604 Gas Price: 3) Large Increase Residential Commercial Industrial Total 1.000 1.000 1.000 1.000 1.444 1.295 1.376 1.382 2.007 1.044 2.286 1.867 4.328 2.257 4.911 2.479 2.791 1.640 3.458 3.427 Electricity-Demand Analy~6 production in the rate structure, and rising prices in other segments of the economy. Such a doubling of price would definitely slow down the rate of growth of electric-power demand; in Texas, for example, the electric-power demand would rise from 96,135,342 KWH in 1970 to 236,885,411 KWH in 1990, even assuming constant gas prices. This is much less than the FPC has projected. This analysis indicated that changes in the price of electricity are more important than population-trend varia­tions in determining future electricity demand. Assuming that the elasticity rates are reasonable, electric-power planning in the next few decades is not likely to be significantly changed as a result of different population­growth assumptions. For the next five years, all the projections are quite close to one another. Thus, for short-term planning, neither the price of electricity nor population trends will make a significant difference. For long-term planning, however, the price of electricity does appear to influence growth of electricity demand. Inflation, increasing environmental con­cern, fuel scarcity, and rising costs of plant construction and operating could be instrumental in increasing the price of electricity, consequently slowing the future growth in electrical energy usage. CONSERVATION OF ENERGY Another important factor that could slow the growth of electricity demand is energy conservation. The term "conservation" implies the rationing of a resource. Resources can be rationed for a number of reasons, but the rationing process can be described by three distinct mechanisms. In the economic sense, all resources which are not free are rationed by their prices relative to substitutes. Thus the use of plastics in modem automobiles can be viewed as the rationing of steel and other metals by means of substitution. In the political sense, resources for which there are no substitutes available are rationed by regulation when the price mechanism will not adequately meet some arbitrary criteria for distribution. The most obvious example here would be the rationing of gasoline , rubber, and leather during a time of war. From a biological and environmental perspective, externalities or perceived side-effects associated with the use of a resource are rationed on the basis of the capacity of the human and biological environment to absorb them with little or no damage , leading to a rationing of the resource itself. Common examples in this category would be exposure to drugs, X-rays, or pollution of the air and water. Thus our patterns for use of various resources, and subsequently our attitudes toward using them, are determined by three forces: • economic cost, political regulation, and voluntary restraint based on fear of externalities. It is easy to trace the evolution of American attitudes toward the consumption of energy resources in these terms. First, energy in America has always been relatively inex­pensive. U.S. gasoline prices are about one-half the · European equivalent, and the average household electric bill has represented only a small fraction of total family expenditures. Second, public policy has traditionally stayed away from coercive rationing of energy resources, except in times of national emergency. In fact, President Nixon, in his 1970 energy message to Congress, urged the adoption of an energy policy that would provide all the cheap, clean energy that Americans demanded. Third, only within the last few years has there been serious concern with the environmental and biological side-effects of an over­dependence on energy. The effect of the basic rationing forces is revealed by the fact that the United States consumes 33 percent of world energy-production, while accounting for only 6 percent of the population. The result has been a traditionally carefree attitude toward the use of energy, which affects daily lives in ways that are frequently overlooked. Self-cleaning ovens and frost ·free refrigerators require twice the amount of electricity as standard models, for example. American automobiles consume two to three times the amount of gasoline required by many foreign models, and the new antipollution devices increase con­sumption by an additional 7 percent. With the exception of large industrial processes, energy efficiency has never been a critical parameter in the design of American artifacts. It follows, then, that technological development is not a sufficient answer to the question of energy conservation because the directions that our technologies follow depend upon our acceptance of prevailing forces of rationing. Consider the engineering efforts of the industrial sector, where economic cost of energy resources does in fact serve as a powerful rationing force. In January, 1973, Alcoa announced that it had developed a new process for making aluminum that would require 30 percent less electricity than present methods. Compare this effort with the case of air conditioners, where the average unit on the market today is only half as efficient as the most energy efficient models already possible. Another glaring example can be found in housing construction. It has been estimated that a house with enough insulation to meet the homeowner's optimum economic point would require 40 percent less energy for space heating than does one meeting the 1970 Federal Housing Administration standards. If all homes in the U.S. had this optimum level of insulation, the total energy need would decrease by almost 4 percent. These examples serve to illustrate that technology does not in itself solve anything, for more efficient technologies in housing and air conditioning already exist. However, there ~IJl!rgy in Texas Volume I are no rationing forces strong enough to induce further technological development or to encourage the use of existing energy-saving techniques. Holding the rationing forces constant, demand is pro­jected to outstrip supply in the near future unless drastic improvements in supply technology are realized. The fallacy in this assumption is that there is no reason why the rationing forces should remain constant. This is not to say that supply technologies and incentives should not be pursued; rather, any attempt to hold the rationing forces constant would place untenable pressures on our capability to produce energy in the long run. Reasonable government policies must be aimed at both the supply, and the demand sides of the energy equation. What is commonly referred to as the "energy crisis" is a function of our dependence on energy as well as its supply, and strengthening the rationing forces would only serve as an impetus for technologies directed at reducing that depen­dence. Govemment Action In October, 1972, the Office of Emergency Preparedness (OEP) issued a report on the conservation of energy; the recommendations of that report are included in Appendix C. Most of the measures recommended by OEP were well beyond the power of that agency to enact, although it did undertake an advertising effort aimed at informing the public on energy conservation and potential energy short­ages. Additional action will have to come from legislatures and government agencies, where policy changes are cur­rently being proposed and debated. The following measures are among those that have been advanced by various individuals and groups to accommodate various rationing forces. While by no means complete, the list offers a representative cross-section of conservation alternatives. Economic Measures -The price of interstate shipments of natural gas, which has been kept artificially low by the Federal Power Commission, could be raised substantially. This would have greatest impact in the industrial sector (including electric-power generation), and tend to redirect end-use to the residential sector. At present, almost one-half the growth in residential electricity use is accounted for by direct heating-that is, space-heating, water-heating, cooking, and clothes-drying. For these four functions, natural gas is two to three times as efficient as electricity in terms of total energy consumed. -Taxes on gasoline could be raised to discourage in­efficient transportation by automobile. It is estimated that approximately 30 percent of the energy devoted to transportation could be saved through the use of transportation modes which use energy more efficiently. This potential saving of energy represents almost eight percent of the U.S. energy budget. -A tax could be levied on the end-use of all energy forms, especially in the industrial sector, which consumes 41 percent of all energy. Such a tax could be progressive, thereby greatly increasing the incentive to develop processes which use energy efficiently. -A "super daylight-saving time" has been suggested­moving the clocks ahead one hour in the summer and two hours in the winter, in order to take best advantage of natural lighting during business hours. -The price structure of the electric-utility industry could be modified. At present, the largest users pay the cheapest rates. The differences between residential and industrial prices could be reduced, and a progressive rate-structure used in both sectors. -A truth-in~nergy bill has bee.n proposed that would force manufacturers of appliances to state the total amount of energy required to operate each product. As an example, up to one-third of the total energy required to operate a gas stove can be consumed by the pilot lights alone. Thus, the consumer would have the opportunity to shop and make decisions based on the cost of operation as well as on the cost of the product itself. -Increased subsidies for low-cost mass-transit would help discourage the use of automobiles. The aim would be not only to provide an alternative but also to make the automobile a relatively expensive method of commuting. Local governments could also increase road tolls and institute taxes for downtown parking as further incen­tives to use mass transit. Political Measures -Energy efficiency for intercity passenger service is lowest for the airlines. The FAA could place a minimum­occupancy rate for airline service, especially the shuttle services that depart every one or two hours. ~ FHA and VA housing standards for federally guaranteed mortgages could be changed to provide for increased insulation and mandatory use of flourescent lighting in kitchens and bathrooms. Fluorescent lighting uses much less electricity than standard incandescent lamps. Local building codes could be adapted to increase energy efficiency in commerical buildings. Changes could be made in insulation, fluorescent lighting, decorative lighting, and window requirements. (The precedent for windows is already established since most building codes already require either a window or an air vent in all bathrooms.) -Maximum horsepower ratings could be placed on auto­mobile engines. The economic counterpart of this measure would be to place a heavy excise tax on all engines over a certain size. As noted earlier, natural gas is most efficient for use in the household sector. End-use priorities could be placed on natural gas; this would be a more direct method of assuring efficient allocation than would a change in price. -As a last unpalatable resort, the government could tum to rationing or limiting imports to levels below demand. Southern California is presently facing the possibility of gasoline rationing in order to meet the Environmental Protection Agency's clean air standards for 1976. Voluntary Measures The government could take a more active role in insuring that new energy technologies are fully disclosed and publicly debated before they are instituted. As an example, the problems associated with radioactive wastes of a nuclear power plant have not been entirely resolved. This is an area where the public should be given the choice of "limited power generation" or "nuclear power and the potential effects of nuclear-waste build­up." If the public chose limited power, they would be forced to consider the individual's role in terms of public awareness and voluntary restraint. -Mass-media promotional techniques similar to those initiated by OEP could be used to further stimulate public awareness of energy conservation. Such promo­tions could take many forms, using the economic appeal of "lowering the family electric bill" as well as deploring the pollution of the environment. An example would be promoting the re-cycling of aluminum beer cans, which indirectly lowers the power requirements of the energy­intensive aluminum industry. Energy Conservation and Electric Utilities Electric utilities constitute the most rapidly expanding market for primary sources of energy. Of the four major energy-consuming groups, electric utilities are expected in the next 20 years to increase their share of the market from 25 to 38 percent (Science, April, 1973). Hence, improving the efficiency of power generation and transmission could be of major significance. Historically, the electric-utility industry has sought to economize its use of fuels in an effort to reduce operating expenses. In 1900 the generation of electricity was about 5 percent efficient; today, the newest coal-fired plants can achieve almost 40 percent and the average for all existing power plants (including light-water nuclear reactors) is around 32 percent (Science, December, 1972). In response to growing concerns for a systematic effort to reduce the wasteful conversion of fue1s to electricity, the electrical utility industry has recently created a national research corporation, funded on a shared basis, to organi7.e research on crucial electrical power problems. Some of the energy­conserving techniques being studied by this group include: ( 1) Combined ga1 and 1team turbines, capable of burning natural gas, oil distillates or products produced from coal gasification. By using combined cycle systems greater efficiencies can be achieved than by operating a gas or steam turbine alone. (2) Magnetohydrodynamics, a process that directly converts energy to electricity by squirting hot, ionized (electrically clwged) gas through a magnetic field. MHD techniques promise greater generating efficiencies as well as lower maintenance and cooling require­ments. (3) Turbulent fuel mixing, an experimental tech­nique for mixing air with oil to achieve 99 percent combustion. At some future time this method may contribute to the reduction of fuel waste as well as air pollution. (4) Cryogenic transmission, a laboratory method that uses low-temperature technologies to increase the transmission efficiency of elec­tricity. On a laboratory scale exceedingly high-distribution efficiencies can be achieved, but many problems stand in the way of practical application. (5) Waste-heat utilization, the collection and use of waste heat dissipated from electric-power plants to supply the heating requirements of local residential and commercial structures. (6) Total~nergy systems, the design and construc­tion of integrated utility packages that would supply electric-power heating and cooling, and liquid and solid waste disposal to residential complexes and shopping centers. Summary There is no doubt that some of the rationing forces for energy use will be strengthened in the coming years without government intervention. For example, most oil companies predict that gasoline prices will rise rapidly whether or not the govemmen t raises the gasoline tax. But the government is clearly in a position to influence these changes: it can attempt to stall or cushion them, or it can encourage and complement them. Between 1950 and 1970, total U.S. Energy in Texas Volume I energy-use doubled, but only about 40 percent of this rise is attributable to population growth. The remaining 60 percent is generally attributed to increased affluence, but a significant fraction of this increase results from waste. Ifwe could decrease this waste, the growth of electricity demand would be dampened. Slowing down the rate of growth of electricity demand would thus help reduce the proportions of the "energy crisis". CONCLUSIONS AND POLICY Th:tPLICATIONS From the time-series analysis, national electricity pro­duction can be viewed as a linear function of families and unrelated individuals, service employment, and personal consumption. It may be that these three factors reflect residential, commercial, and industrial uses of electricity, but the only positive conclusion to be drawn is that no one factor explains all three uses. Our regional analysis made it clear that the only significant common denominator among the 48 contiguous states that can be associated with electricity production is the number of households. Unlike the time-series analysis, personal income and service employment share no relation­ ship with electricity production over all geographical regions. The time-series analysis implies that increases in region­ al service employment and personal consumption will be accompanied by a national increase in demand for electri­ city. However, the increase in demand may not necessarily occur in the same region as do increases in the other factors, because service employment and personal con­ sumption showed no association with state electricity production. Since increases in service employment and personal consumption are indicators of a rising standard of living, clearly a region may experience the benefits of an increase in its standard of living without having to pay directly the associated social, aesthetic, and environmental costs of increased electricity production. It is possible that these burdens may be transferred to other sectors of the economy and other regions of the country. It should be apparent that national projections cannot be generalized for all the states because states differ con­ siderably in their commercial and industrial makeup. This would mean that the only relation to the "energy crisis" that any particular region could be sure of would be through factors correlated with the use of electricity. If this were the case, then a state would be incorrect in assuming that projected demand for the nation would mean a propor­ tional increase in state demand. Our causal analysis model makes this very clear. The demand forecast shows that variation in the price of electricity is the most important variable in projecting the electric-power demand. Hence, electric-power planning in Texas in the next few decades is not likely to be changed because of population trends or in-migration patterns. In the next five years all the projections are reasonably close to one another. Thus, for short-term planning, neither the price of electricity nor population trends will make a significant difference. Long-range planning, however, can be substantially affected by pricing policies. The price of electricity, identified as an important and adjustable factor, can be used to conserve energy as well as to influence the growth of electricity demand. Not everyone would agree with this analysis. In fact, the major electric utilities in Texas do not believe that the price of electricity is as important as our model assumes. They argue that the consumption of electricity accounts for only a fraction of an average household's budget and that a gradual increase in price would not alter present con­sumption patterns. Although it is generally believed that discouraging growth of demand for electric power will result in a declining rate of economic growth, a recent study con­ducted by the RAND Corporation for the California State Legislature concludes that energy-conservation policies could reduce the number of new electric power plants needed in California from 127 to about 45 with only relatively minor economic impacts and dislocations. This finding has led some federal officials to question whether increases in energy use and economic growth are necessarily correlated. In fact, they are not correlated at the regional and state level, although they have been closely associated nationally. On the other hand, generation, transmission, and waste-energy problems associated with increasing energy usage have definitely caused the quality of the environment to deteriorate. Ifa state's economy remains unaffected by decreases in the rate of electricity consumption, then it is certainly desirable to encourage energy conservation. The Texas electric utilities agree that significant economies of energy can be achieved through such conservation measures as better home insulation, improved building codes, and increased power-generation efficiencies. This would not only lengthen the life-span of available fuels but provide additional time for the development of safer, more eco­nomical, and less environmentally damaging sources of electric power. Electricity-Demand Analy~ REFERENCES 1. "America's Energy Crisis," Newsweek, January 22, 1973. 2. Chapman, D., T. Tyrrell, and T. Mount, "Electricity Demand Growth and the Energy Crisis," Science, vol. 178, no. 4062 (November 17, 1972). 3. "Conservation of Energy-The Potential for More Efficient Use," Science, December 8, 1972. 4. Doctor, R.D., K.P. Anderson, et al., California's Electricity Quandry: Ill Slowing the Growth Rate, R-116-NSF/CSA, RAND Corporation, Santa Monica, Cal­ifornia, September, 1972. 5. Graham, R.E., Jr., H.C. Degraff, and E.A. Trott, Jr., Survey ofCunent Business, 52, no. 4, 1972. 6. "John Bardeen-A Profile," Saturday Review of the Sciences, March, 1973. 7. l.andsburg, Hans H., Leonard L. Fischman, and Joseph L. Fisher, Resources in America's Future: Patterns of Requirements and Availabilities, 1960-2000. Published for Resources for the Future, Inc., by the Johns Hopkins Press, Baltimore, 1963. 8. Mooz, W.E., and C.C. Mow, California's Electricity Quandry: I. Estimating Future Demand, R-1084-NSF/ CSRA, RAND Corporation, Santa Monica, California, September, 1972. 9. National Petroleum Council, Committee on U.S. Energy Outlook, U.S. Energy Outlook: An Initial Ap­praisal, 1971-1985 (interim report). National Petroleum Council, Washington, D.C., 1971. 10. Schurr, Sam H., and Bruce Netschert, with Vero Elias berg, Joseph Lerner, and Hans H. Landsburg, Energy in the American Economy, 1850-1975: An Economic Study of its History and Prospects. Johns Hopkins Press, Balti­more, 1960. 11. U.S. Bureau of Mines. "An energy model for the United States featuring energy balances for the years 1947 to 1965 and projections and forecasts to the years 1980 and 2000," Information Circular 8384. U.S. Government Printing Office, Washington, D.C., July, 1968. 12. U.S. Federal Power Commission, National Power Survey. U.S. Government Printing Office, Washington, D.C. 1970. 13. U.S. Office of Emergency Preparedness, ''The Potential for Energy Conservation-A Staff Study." U.S. Government Printing Office, Washington, D.C., October, 1972. 14. , "The Potential for Energy Conser­vation, Substitution for Scarce Fuels-A Staff Study." U.S. Government Printing Office, Washington, D.C., January, 1973. 15. U.S. Office of Science and Technology, Energy Policy Staff, A Review and Comparison ofSelected United States Energy Forecasts. Prepared by Pacific Northwest l.aboratories of Battelle Memorial Institute. U.S. Govern­ment Printing Office, Washington, D.C., December, 1969. 16. U.S. Senate, Committee on Interior and Insular Affairs, Report of the National Fuels and Energy Study Group on Assessment ofAvailable Information on Energy in the United States. Senate Document 159, 87th Congress, 2nd Session. U.S. Government Printing Office, Washington, D.C., September, 1962. ,. ' APPENDIX A NATIONAL AND REGIONAL DEMAND-ANALYSIS The basic purpose of this multiple-correlation analysis is to produce a linear combination of independent variables which will correlate as highly as possible with the dependent variable. This linear combination can then be used to describe values of the dependent variable. The linear-correlation equation can be written as follows: D=b1I 1 +b2I2 + ........ +bnln+C, where D is the dependent variable, the I's are the independent variables, the b's are the regression coefficients (unnormalized), and C is a constant (or intercept). Multiple linear-correlation could be used to understand the nature of electricity demand. This involves obtaining the regression equation and for forecasting purposes the values of all the independent variables as well as the equation itself. Understanding the phenomenon of electricity demand involves a time-series analysis, taking aggregate national demand over the period from 1951 to 1970, and a regional analysis, based on electricity demand in each of the 48 contiguous states in one particular time-period. TThiE-SERIES ANALYSIS In the time series analysis, the aggregate national demand for electricity was made dependent on other aggregate national variables: population (X2), families and unrelated individuals (X3), industrial employment (X4), service employment (X5), total employment (X6), personal consumption (X7), personal consumption of durable goods (X8), residential investment (X9), total services (X10), total goods (X11). total GNP (X12). Using the data in Table 5, the equation obtained as a first step was: X1 = -2.012x109 -3177 X2 +34680 X3 +41740 X4 +64720 X5 -36400 X6 +2847000 X7 -323600 X8 +1600000 X9 -2330000 X10 -554100 X11 +13530 X12 , ..... ...................... .... . .. .......... (1) where X 1 is the national production of electricity. Since the independent variables in this equation are measured in different scales (e.g., population in millions, GNP in billions of dollars), the regression equation has to be normalized to determine which independent variable is the most important predictor of electricity demand and to determine if any of the variables can be omitted without losing much descriptive ability. The general form of the normalized equation is: D = B1I1 + B2I2 + ...... . + Bnin , where the B's, the weights (coefficients) attached to the independent variables (the I's), are in the standard form and satisfy the criterion of least squares. (Each of these coefficients is conventionally denoted by the letter "beta".) A "beta" is the average change in the criterion variable per unit change in the independent variable with which the "beta" is associated, with the influence of the other n-1 independent variables removed. Thus a B 12 = 0.1 would mean that if all other variables were held constant and if I12 changed by 50%, then D would change by 5%. When the normalization operation was applied to equation (I), the normalized equation obtained was: X1 = -.138 X2 +.499 X3 +.100 X4 +1.051 X5 -.618 X6 +.618 X7 -.016 X8 +.009 X9 -.361 X10 -.078 X11 +.005 X12 .. ..... ...... .. . ........ (2) Since the coefficients for~. X8, X9, X11. and X12 are less than 0.1, these variables (industrial employment, personal consumption of durable goods, residential investment, total goods, and total GNP, respectively) have little impact on electricity demand. Also, such small coefficients might be the result of statistical sampling error or other external factors, and it is reasonable to remove them. This does not, however, mean that there is an insignificant correlation between these variables and the dependent variable. For example, X8 has 98.09% correlation with X1 and 98.9% correlation with X7. The greater the relationship between two independent variables (e.g., X8 and X7), the more desirable it is to eliminate one of them from the analysis. This is because only one of them can make any appreciable contribution to the over-all relationship; the net effect of the other variable is likely to be extremely small. The normalized equation obtained by removing these five variables was: Electricity-Demand Analyses X1 = -.141 X2 +.542 X3 +.324 X5 + .058X6 +.493 X7 -.278 xl 0 ................ . .......... . (3) The coefficient of X6 is .058. Since it was insignificant, X6 (total employment) was also removed from pie calculation. With the reduced set of independent variables, the (normalized} equation became: X1 = -.164 X2 + .518 X3 + .414 X5 + .530 X7 -.302 X10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) In the normalized equation, X2 and X 1 ohave negative coefficients and were dropped. The resulting (normalized) equation was : X1 = .3807 X3 + .3758 X5 + .2636 X7 ......... .. ...(5) where X3 is families and unrelated individuals, X5 is service employment, and X7 is personal consumption (in thousands, thousands, and billions of dollars, respectively). REGIONAL ANALYSIS The regional analysis was done for the year 1970 over the 48 contiguous states, with electricity demand in each state related to the independent, variable values in that state. (In the time-series analysis, 20 data points in time were taken, whereas in the regional analysis 48 data points over space were used.) Variables considered were production of electricity (XI), population (X2), households (X3), manufacturing, mmmg, and construction employment (~), service employment (X5), total employment (~),personal income (X7), and value added by manufacture (Xg). Table 11-6 gives the values of these variables . The spatial, multiple-correlation analysis, after going through the same elimination steps used in the time-series analysis, provided the equation: X1=5565300+ 1918200X3+1365200Xg; ........ (6) the normalized equation obtained was: X1 = 0.855 X3 + 0.0346 Xg ... . ....... .... ...... (7) The equations (5) and (7) explain the electric demand as related to other aspects of national and regional activity and relative impacts of these activities on the electricity demand in the nation or a state, respectively. If all these activities (or independent variables) are forecast for a time-period, then the demand for electricity can be forecast for the same time-period. TABLE 11-5 ;r Data for Variables Considered in Multiple Regression Analysis s· f ~ E" ~ ..... ~ -...J SOURCES-TABLE 11-5 1. U.S. Federal Power Commission, Production ofElectric Energy; Capacity ofGenerating Plants, Washington, GPO. Monthly from 1951-1962. ___ . Electric Power Statistics, Washington, D.C., GPO. Monthly from 1963-1970. Figures for Alaska and Hawaii subtracted from total. 2. U.S. Bmeau of Labor Statistics. Handbook ofLabor Statistics. Washington, D.C., GPO, 1971. Population of Alaska and Hawaii subtracted from total. Does not include armed forces abroad. 3. U.S. Bureau of the Census, Cu"ent Population Reports: Consumer Income, "Income in 1970 of families and persons in the U.S.", Series P-60, No. 80, Washington, D.C., GPO, 1971. Total for all 50 states. 4. Source same as #2. Alaska and Hawaii not included. Subtracted mining, construction, and manufacturing for 1959-1970, and also agriculture for 1960-1970. 5. and 6. Source same as #2. Alaska and Hawaii subtracted from total. 7. U.S. Office of Business Economics. National Income and Products Accounts for the U.S. 1929-1965: Statistical Tables. Washington, D.C., GPO. For years 1950-1965. ·-· Survey of Current Business, Washington, D.C., GPO, February, 1970. For years 1966-1967. U.S. Bureau of Economic analysis. Survey of Current Business. Washington, D.C., GPO, February, 1972. For years 1968-1970. All figures for all 50 states in 1958 constant dollars. 8., 9., 10., 11., 12. Source same as #7. TABLE 11-6 STATE MAINE N.H. VT. MASS. R.I. CONN. N.Y. N.J. PENN. OHIO IND. ILL. .j::. 00 MICH. WIS. MINN. IOWA MD. N.D. S.D. NEB. KAN. DEL. MO. VA. SOURCES: Listed next page ~ ~ ~­ ~· i t, :i... ~ STATE~ W.VA. N.C. s.c. GA. FLA. KY. TENN. ALA. MISS. ARK. LA. OKLA. TEXAS ~ MONT. \0 IDAHO WYO. COL. N.MEX. ARZ. UTAH NEV. WASH. ORE. CALIF. SOURCES-TABLE 11-6 1. U.S. Federal Power Commission, Electric Power Statistics, Washington, D.C., GPO, Jan. -Dec., 1969. 2. through 7. U.S. Bureau of the Census. Statistical Abstract ofthe United States: 1970. Washington, D.C., GPO, 1970. 3. U.S. Office of Business Economics. Survey ofCurrent Business, 1969, v. 49. Washington, D.C., GPO, 1969. s· ~ ~ [ ~ ..... , ...,~ , P.a APPENDIX B CAUSAL ANALYSIS FOR TEXAS PROJECTIONS The projection model employed here is a modification of one developed by Cornell University and Oak Ridge National Laboratory under a National Science Foundation's RANN (Research Applied to National Needs) grant. (Chapman, et al., 1972) This model uses causal analysis to forecast the demand for electricity, rather than simply examining statistical trends, as demand models frequently do. The causal factors considered in the model (in order of importance) are: price of electricity, population, personal income, price of natural gas, wholesale price index, and consumer price index. In addition to these causal factors, the economic concept of elasticity is used to describe the relative magnitude of influence of these factors. The elasticity of a causal factor represents the precentage change in the demand for electricity associated with a l percent change in that causal factor; for example, an elasticity of -1 .3 for residential electricity price implies that a 1 percent increase in the price of residential electricity would, in the long run, result in ·a 1.3 percent decrease in the demand for residential electricity. Table 11-7 shows the values of elasticities used for all the causal factors. It is assumed that these values do not change significantly over the different geographical regions, and that the elasticity values arrived at in the Cornell-Oak Ridge study are applicable to Texas. Also indicated in Table 11-7 are the values of Q, a time response factor. The percent of response in the first year is equal to 100(1-Q); for example, if Q is 0.9, then the first year response is 10%. This model was used to predict demand for electricity in Texas for all three consumer classes-residential, commer­cial, and industrial. Table 11-8 provides the values of the causal factors used for this prediction. Two different esti­mates were used for the population and the price of electri­city. The population figures are the authorized state esti­mates developed recently by the Population Research Center, The University of Texas at Austin. High population figures are based on the U.S. Bureau of the Census (1972) Series I-C projections (a slightly increasing fertility-rate and a continuation of interstate migration at 1960 to 1970 levels), while low-population figures are based on the Bureau's Series I-E projections (a slightly decreasing fer­tility-rate and a continuation of interstate migration at 1960 to 1970 levels). The Federal Power Commission (FPC) price estimates are projections made by the Federal Power Com­mission for the South Central Region, which contains Texas. (FPC, 1970) The "double-by-2000" price estimates assume that the price of electricity will double (in real dollars) between 1970 and the year 2000. Low gas-price estimates are obtained from the recent National Petroleum Council energy study. (National Petroleum Council, 1971). It was assumed that the percentage change in the price of gas (in real dollars) over the next 20 years would be relatively similar for all three consumer-classes. A similar assumption was made regarding the price of electricity for the three consumer-classes. The rates of change of prices, rather than the prices themselves, are required for the TABLE 11-7 ELASTICITIES OF CAUSAL FACTORS Elasticity First Time Consumer Electricity Population Income Gas Year Response Price Price Response Parameter Residential -1.3 +o.9 +0.3 +o.15 10% 0.90 Commercial · -1.5 +l.O +0.9 +0.15 11% 0.89 Industrial -1.7 +l.1 +o.5 +o.15 11% 0.89 Source: Chapman, D., T. Tyrrell, and T. Mount, "Electricity Demand Growth and the Energy Crisis," Science, Vol. 178, No. 4062, November 17, 1972. forecast; hence no attempt was made to obtain the exact tricity (FPC), already in 1968 constant dollars, was used as prices of gas and electricity. Projections of the Consumer given for residential consumers. For commercial and in­Price Index (CPI) were extrapolated from past trends. The dustrial consumers it was deflated by the Wholesale Price price of gas was deflated by the Consumer Price Index for Index. All the values of the causal factors were converted to residential consumers and by the Wholesale Price Index for indices using 1970 as a base. The new values are given in commercial and industrial consumers. The price of elec-Table 11-9. TABLE 11-8 VALUES OF CAUSAL FACTORS FOR THE TEXAS ENERGY DEMAND ESTIMATES 1990 1970 1975 1980 1985 Population High Assumption Low Assumption 11,196,730 11,196,730 12,000,700 11,859,700 13,068,600 12,632,500 14,256,300 13,628,300 15,450,000 14,481,800 Price ofElectricity in mills/KWH FPC* 1.48 1.54 1.60 1.66 1.72 Double-by-2000* 1.48 1.726 1.971 2.217 2.460 Price ofNatural Gas in cents/MCF@ Constant 26 27 28 29 30 Medium Increase 25 so 75 83 100 large Increase 25 63 100 150 200 Wholesale Price Index 1970=100.000# 100.000 114.140 130.400 148.980 165.000 Consumer Price Index 1970=100.000 100.000 116.500 133.000 149.500 156.000 Sources: FPC-Federal Power Commission, The 1970 National Power Survey, Part I, U.S. Government Printing Office, Washington, D.C., 1970. NPC-National Petroleum Council, Committee on U.S. Energy Outlook, U.S. Energy Outlook, Vol. 2, Washington, D.C., 1971. Electricity-Demand Analjiel TABLE 11-9 VALUES OF CAUSAL FACTORS CONVERTED TO INDICES (in constant dollars, 1970= 1.000) 1990 Variable 1970 1975 1980 1985 Population High Assumption Low Assumption 1.000 1.000 1.072 1.059 1.167 1.128 1.273 1.217 1.380 1.293 Price ofelectricity FPC : residential : commercial : industrial Double-by-2000 : residential : commercial : industrial 1.000 1.000 1.000 1.000 1.000 1.000 1.041 1.062 1.062 1.166 1.190 1.190 1.081 1.103 1.103 1.332 1.359 1.359 1.122 1.126 1.126 1.498 1.503 1.503 1.162 1.099 1.099 1.664 1.573 1.573 Personal Income 1.000 1.109 1.219 1.328 1.438 Price of Gas Constant : residential : commercial : industrial Medium Increase : residential : commercial : industrial Large Increase : residential : commercial : industrial 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 0.891 0.910 0.910 0.500 0.511 0.511 0.393 0.401 0.401 0.810 0.826 0.826 0.333 0.339 0.339 0.250 0.255 0.255 0.746 0.749 0.749 0.301 0.302 0.302 0.166 0.167 0.167 0.740 0.699 0.699 0.250 0.253 0.253 0.126 0.124 0.124 Some variation may occur due to rounding. ~:~.~··--'R'PPIY in Texas Volume I Note that the price of electricity (gas) is not the same for commercial and industrial consumers; however, the rate of change of the price is the same for each sector. Thus, the percentage increase in the price of electricity (gas) will be the same in the two sectors. The present model is defined as: where Q: demand for electricity PE: price of electricity N: population Y: personal income PG: price of gas · A: constant Q: time response parameter fj: elasticity for population a : elasticity for price of electricity 1$ : elasticity for real income er: elasticity for price of gas i: denotes the consumer class t : denotes time period (year) The interval chosen for this analysis was five years, i.e., (t+ 1)-t =five years. In order to use the variable index values with 1970 values as base values, equation (I) above is rewritten as: ' g· Q" "R·1 Qit =Ai (Qi,t-1) 1 (PEit/PEi,1970) 1 (Nt/N1970) (YtfY1970,i (PGi,t-1/PGi,l 970)'1'i (PEi,1970) i (N l 970fi (Y 1970) i"(PGi,l 970)"i · · · · · · · · · · · · (2) Since (PEi,197o)Qi, (N197ofi, (Y1970) i, and c c..> CJ "' ~ ~ c..> 0... ~ 2: "°r-: N M en E- z < ....J 0... CJ z f:: < :::::: :.:..J z :.:..J -~ '-/ ~ c:: ~ ~ :..u 0 e::: 0... :J L!.. CJO u::: ­ en E- en 0 u .,, > E­ < :::::: < 0... 2: 0 (.; "' 0 u 0 C!l ~ c..> > < 3 0 E­ CIC r--: M "° en E- en 0 u CJ z f:: < :::::: :.:..J 0... 0 ~ oc N r--: c-, c­ ("'! 6 ~ u 0.. "' / :-0 c..> "' '3 :J z 0 0 0 N "'· ~ E 0 " ("') ..... °' c " ~ 2 0. x " 2 "' "' ""0 c_., - c. " en ~ CJ :::::: < u a u.J >< L!.. I N en E- en 0 u ...J :..u :J ., ,, . ;,s¥, MAPI f et. s· NUCLEAR POWER REACTORS in the UNITED STATES ~ ~ ~ $:' ~ ..... ·* 0\ w • .A. PUERTO RICO e L£) 207 197 ,539 ,400 *22 additional generating units are planned for which reactors have not been ordered representing 25 ,038,000 kilowatts. U.S . Atomic Energy Commission March 31, 1974 Because of space limitations, symbols do not reflect precise locations. t includes 2 U.S. owned plants operated by utilities. Fuels: Costs, Reserves and Future Prospe&, FIGURE III-3 NUCLEAR FUEL CYCLE FOR UGHT-WATER REACTOR REACTOR FABRICATION PREPARATION OF FUEL OXIDES ENRICHMENT & CONVERSION CONVERSION MILLING PU FOR SALE Pu CONVERSION STORAGE URECYCLE CONVERSION REPROCESSING FISSION PRODUCTS ISOTOPE RECOVERY MINING Source: Federal Power Commission, National Power Survey, 1970. 64 l~in 1,'e:xas Volume1 TABLE III-3 Estimated Ore Reserves of U303 By End of 1972 At $8.00/Pound Contained State Tons of Ore %U303 Tons U308 1) New Mexico 51,700,000 .27 137,000 2)Wyoming 51,100,000 .19 94,900 3) Texas 10,200,000 .14 14,600 4) Colorado 3,300,000 .27 8,900 5) Utah 2,600,000 .33 8,600 6) Others 8,000,000 .11 9,000 TOTAL 127,000,000 .22 273,000 Source: U.S. Atomic Energy Commission, 1972 Note: Recoverable reserves would increase significantly if price increased to $10.00/pound TABLE III-4 Fuel-Cycle Costs for a 1,000 -MW Plant1 Charge Date Reactor Type Fuel Cycle Costs Mills/KWH 1975 .................... .. LWR 1.7-1.9 1980...................... LWR 1.5-1.7 1985 ...................... LWR 1.4-1.6 1990...................... LWR 1.4-1.6 1980...................... HTGR 1.2-1.4 1990...................... HTGR 1.0-1.2 1985/1990.................. LMFBR 0.6-0.9 1 From Report of the EEi Reactor Assessment Panel, April 1970. In 197 5 dollars. --~ Fuels: Costs Resenes and Future~. costs for coal will make attractive the alternative of locating generation plants at the fuel source and transmitting the electric power rather than the fuel to the load area. Mine-mouth, lignite-fired plants are planned for north central Texas. An important factor in selecting mine-mouth sites will be the extensive system of Extra High Voltage (EHV) transmission lines available. Where they are avail­able, additional transmission investments are minimal. According to the 1970 National Power Survey many of the transmission problems that have affected the com­petitive status of coal-fired plants in the past will disappear in the next decade as utilization of the EHV grid permits location of plants near the fuel source rather than the load center. With regard to liquefied natural gas (LNG), the principal advantage is that it can be transported under certain circumstances more economically than natural gas. The four basic processes in an LNG liquefaction plant are purification, liquefaction, storage, and vaporization. One cubic foot of LNG results in a volume of approximately 632 cubic feet of methane at 70 degrees and 14.73 psia (one atmosphere). The transport of natural gas requires a continuous pipeline between the source and the consumer. In Texas alone, it takes more than 100,000 miles of pipeline to serve the industry's 2.8 million customers (Ryan, 1972). Most of the nation's transmission mains originate in the major producing-states of Texas, Louisiana, New Mexico, Oklahoma, and Kansas. Of the 248,000 miles of trans­mission mains in the United States, 72 percent are subject to the jurisdiction of the Federal Power Cormnission. FUEL-USAGE IN THE UNITED STATES AND TEXAS More than 70 percent of all electric energy produced in the United States today comes from the burning of the so-called fossil fuels: coal, oil, and natural gas. All three are used in boilers to produce steam to drive turbines. Gas and some oils are also used in connection with gas turbines and internal combustion engines. (See Figures III-4 and 5; Table III-5.) Coal is the most widely used of the fossil fuels in the generation of electrical power, and most projections show an increase in the amount and the ratio of coal that will be used for generating power in the next 20 years (See Figure III-5). TABLE III-5 PRODUCTION OF ELECTRIC ENERGY IN THE UNITED STATES 1972, 1973 AND PERCENT CHANGE 1973/1972 BY TYPE OF PRODUCER. Utility Hydro Plants Conventional Fuel Plants Nuclear Plants Industrial Total Source: FPC NEWS, 9-6-74 (in billion KWH) 1973 1972 %Charge 1973/1972 1,791,984 1,664,937 7.6 277,325 268,727 3.2 1,448,964 1,352,093 7.2 65,695 44,117 48.9 105,878 103,846 2.0 1,897 ,862 1,768,783 73 'fi,'etgy in Texas Volume I FIGURE IIl-4 1970 NATIONAL CONSUMPTION OF FOSSIL FUELS (in 1012 BTU equivalents) 20,000 22,412 15,000 13,494 10,000 5,000 4,664 COAL OIL . D TOTAL DOMESTIC USE ~TOTAL ELECTRIC-UTILITY USE SOURCE: Fe~ Environmental .Consideratitotlt the quality of their effluents if water-quality stan­dards are to be met for the stream as a whole. The temperature increase in the water stimulates the growth of oxygen-consuming algae and other plants, thus reducing the vital supply of oxygen available for fish and the lower organisms on which they feed. Increased temperature also increases an aquatic organ­ism's metabolic rate and need for oxygen. The temperature changes alter, and may disrupt, the ecology of aquatic organisms, with perhaps an impact on reproduction capabilities. • The temperature change may disturb the equilibrium of plant and animal life (spawning and other critical activities). A plant, animal, or fish unable to live in the changed conditions will leave or die, or be replaced by competitive, more tolerant species, per­haps endangering the food chain on which all aquatic biota are dependent. • The high temperatures may be lethal to fish if the distribution of heated water in the stream is not proper and adequate. Again, it should be emphasized that the effects of waste heat discharges are not fully understood. Given the con­straint that the efficiency of electric power plants is not going to increase significantly in the near future, waste heat must be released into the environment. This will surely affect the environment, but its effects could be minimized by proper heat-dissipation systems. Dissipation ofHeat The National Technical Advisory Committee on Water Quality Criteria, in its interim report of June, 1967, suggested guidelines for thermal dispersion: -maximum temperature increase for rivers: 5.0°F -maximum temperature increase for lakes: 3.0°F -maximum temperature increase l.5°F (summer) for coastal waters: 4.0°F (fall ­spring) These standards can be achieved through various disper­sion methods, including: Once-through cooling 1. Dilution of the heated stream by mixing it with a large quantity of ambient water prior to discharge. This requires an additional pumping system and a place to do the mixing. 2. Use of a large volume flow of cooling water, thereby achieving a smaller temperature rise. This requires a larger condenser and larger pumps and water conduits. 3. Discharge in a fast jet, to promote rapid mixing of the heated discharge with the receiving water, or the use of :·~ '~inTexas Volume/ a large number of discharge points. This requires low temperature and rapid movement of the receiving body of water. 4. Withdrawal of water from locations deep enough that its natural temperature is cooler than the surface water temperature by about the same amount as the temperature rise through the condenser. This requires a cool, deep, and large body of water which may eventually become a marsh. Once-through cooling systems can have the greatest impact on the environment, especially when discharge is into lakes where the cooling capacity is at a minimum because of lack of water movement. Waste-heat discharges into rivers are often less serious due to the cooling effects of stream-flow and turbulence. The dynamic nature of rivers and coastal waters precludes detailed knowledge of how they are affected by warm-water emissions. Studies are underway using infra-red light photography to determine the patterns of warm-water dispersion. Other methods (when once-through cooling systems cannot be used due to the absence of sufficient water or adverse effects on aquatic life) 1. Cooling pond-this involves the controlled recircula­tion of the cooling water in a natural or man-made pond or lake, with natural heat transfer to the atmosphere. This may require about 1,000-2,000 acres of land for a 1,000-MW plant. It has been estimated that for every MW of generating capacity an electric-power plant requires one acre of cooling reservoir, 10 to 60 feet deep, at a building cost of $2,500 per MW. A cooling pond may be used as an intermediate step before returning water to a river or a lake. Such a pond may remove a large quantity of water from the total water available to the area which is significant in the summer when scarcity of water forces a tradeoff between commercial, industrial, and residential usages. 2. Spray pond-the heated cooling-water is sprayed into the air to promote heat transfer and cooling. It is then caught in a reservoir and recirculated to the condenser. This may increase the frequency and severity of fog, rainfall, and high-humidity conditions, creating hazards for highway and airport traffic. 3. Combined spray and cooling pond-this combination allows for a smaller pond but the fog problems associated with the spray pond remain. 4. Natural-or forced-draft, wet-cooling tower-this is essentially a spray-pond-in-a-building. The building prevents excessive loss of water to the atmosphere, since the water is allowed to fall down instead of spraying up. The operating cost is quite high, although the initial capital cost is lower. 5. Natural-or forced-draft, dry-<:ooling towers-these towers rely on the transfer of heat by conduction and convection. The circulating coolant is sealed into the system. It is not presently economically competitive with other methods and systems, and so is not used unless water for cooling purposes is unavailable. This system does not raise significant thermal-pollution issues, does not require water circulation, and does not create fog problems. Figure IV-2 illustrates various cooling-cycle flows diagrammatically. Table IV-4 gives heat rejection data for thermal power plants, while Table IV-5 shows cost esti­mates of different types of cooling systems for fossil-fuel and nuclear fuel electric power plants. Cost alone, however, cannot determine the type of plant or cooling system installed; without adequate long-rwge planning (including environmental and economic considerations), the utilities and the community may incur excessive financial and environmental costs. Conclusion Of utmost importance to the electric-power industry is the availability of water for condenser cooling. The expected growth of nuclear power plants will raise the potential for higher thermal discharges and increase the need for cooling water. The water requirement considera­tions are important because allocation of water is becoming a critical matter for the entire nation, especially in arid regions such as south and west Texas. Misuse of water through inadequate planning may cause a shortage for both local and downstream consumers. Table IV-6 summarizes heat-rejection data concerning land, water, and investment costs of all types of cooling systems for both fossil-fuel and nuclear-fuel power plants. The concept of "ecosystem" is based on the fact that any change in surroundings can affect life. Man, being part of the ecosystem, is affected by whatever affects the system. It is difficult to evaluate the effects of heat on aquatic life. But it is even more difficult to determine the effects on man himself. Environmental Consid~ FIGURE IV-2 COOLING.CYCLE FWW DIAGRAMS STEAM 1---i ~ TURB.-GEN. A. ONCE-THROUGH COOLING CYCLE STEAM B. EVAPORATIVE ("WET") COOLING TOWER CYCLE ~--NATURAL OR DIRECT CONTACT MECHANICAL DRAFT CONDENSER AIR FLOW C. DRY COOLING TOWER CYCLE Source: William H. Steigehnann, "Alternative Technologies for Dis­charging Waste Heat," Power Generation and Environmental Change, ed. by David A. Berkowitz and Arthur M. Squires, The MIT Press, Cambridge, Massachusetts, 1971. ·.. E.nergy in Texas Volume I TABLEIV4 THERMAL POWER PLANT HEAT-REJECTION DATA Nuclear-fueled Fossil-fueled Planet net generating capability lOOOMW lOOOMW Plant thermal efficiency -32.5% -40% Plant heat rate 10,500 BTU/KWH 8,600 BTU/KWH Total heat losses 7.1 X 109 BTU/h 5.2 X 109 BTU/h Heat discharged directly to atmosphere a -103 BTU/h -1.3 X 109 BTU/h Heat discharged from condensers and auxiliary heat exchangers 7.0 X 109 BTU/h 3.9 X 109 BTU/h Cooling water flow rate for 15°F -930,000 gpm -520,000 gpm temperature rise (56 gal/KWH) (31 gal/KWH) aHeat losses through insulation around piping and equipment and from stack in fossil-fueled unit. Source: William H. Steigehnann, "Alternative Technologies for Discharging Waste Heat," Power Generation and Environmental Change, ed. by David A. Berkowitz and Arthur M. Squires, The MIT Press, Cambridge, Massachusetts, 1971. TABLE IV-5 COMPARATIVE COST OF COOLING-WATER SYSTEMS FOR STEAM-ELECTRIC PLANTS Investment cost ($/KW) Fossil-fuel Nuclear plants Type of System plant lMFBRa LWRb Once-through 2-3 2-3 3-5 Cooling pondsc 4-6 4-6 6-9 Wet cooling towers Mechanical draft 5-8 5-8 8-11 Natural draft 6-9 6-9 9-13 Dry cooling tower 17-21 17-21 25-32 aLiquid-metal-cooled fast breeder reactor. bLight-water-cooled reactor. cFor 1,200-2,000-MW generating capacity. Source: Walter G. Belter, 'Thermal Effects-a Potential Problem in Perspective," Power Generation and Environmental Change, ed. by David A. Berkowitz and Arthur M. Squires, The MIT Press, Cambridge, Massachusetts, 1971. '~ '" Environmental ConsitiertltkJiii~j TABLEIV-6 HEAT-REJECTION SYSTEM DATA SUMMARY (1,000 MW unit) Nuclear-Fossil-Type of system fueleda fueled Once-through Turbine back pressure (in. Hg)b 1.2-1.8 1.2-1.8 land area (acres) ependina on Plant Speci1ic1tlon1 C) State Acency ~ No Permit Required, ~ permit Permit Required Review of Pt.int .. C) Specification• Only ~ ...... t;overnoc's Office NRC . Director Division of of Planning Licensing Coocdination 6 Concwrent Review cl Comment permit Parks and Railroad ~Dept. Wildlife Commission Health permit Dept. of Agriculture \0 " permit Water Conservation Quality Board Board permit State Historical Forest Survey way Service Committee t. G contract Water Texas Development Industrial Board Commission NRC :i Texas Bureau of Economic Geology-to avoid siting a nuclear power plant near a geologic fault (Nuclear Regulatory Commission requirement) and to evaluate the support-capability of the proposed site. (3) After a state agency either denies or grants a permit, the utility or an intervenor in the hearings process can appeal the agency decision to the District Court of Travis County, the Texas Court of Civil Appeals, and finally, the Texas Supreme Court. ( 4) In a similar manner, an appeal of a federal agency (i.e., COE or EPA) decision can be made, in tum, to the U.S. District Court of Appeals, the U.S. Court of Civil Appeals, and the U.S. Supreme Court. (5) After the electric utility has received (or is in the process of receiving) all necessary state permits and the permits from the COE and EPA, it submits its application for a construction permit to the Nuclear Regulatory Commission for review . (This NRC review process is discussed in more detail in the section on federal procedures.) ( 6) In its formal review, the NRC prepares a draft Environmental Impact Statement on the proposed plant and distributes the document to various federal agencies in accordance with guidelines established by the Council on Environmental Quality. Copies of the draft EIS are also sent to the governor of the state involved; in the Texas Governor's Office, the Division of Planning Coordination (DPC) receives the draft EIS. The DPC, in tum, distributes the draft EIS to 15 state agencies (see Figure V-2) which are expected to forward necessary and appropriate comments back to the DPC within 30 days. (7) In Texas, the Division of Planning Coordination, Office of the Governor, summarizes the state agency comments and formulates the state response to the NRC. The Directorate of Licensing, NRC, then utilizes the state response and the federal agency comments in the develop­ment of the final EIS. (8) After the NRC has made its decision either to deny or grant the construction permit, the utility or an inter­venor in the hearings process can appeal the ruling to the U.S. District Court of Appeals, the U.S. Court of Civil Appeals, and, finally, the U.S. Supreme Court. Federal Procedures.* Although the electric utility must, for example, receive authorization from the COE to dispose of dredge-and-fill materials and from the EPA to dispose of plant effluents subject to EPA jurisdiction, primary utility contacts at the federal level during the nuclear plant-siting process are with the NRC. The Nuclear Regulatory Commission's procedures for constructing and licensing a nuclear power plant are in two stages. The initial stage is the submission of an application by the utility for a construction permit. Then, after the *Information based upon interviews with Mr. S.A. Schwartz, Office of Government Liaison, NRC, December, 1972. Government /nvolveme1 power plant has been constructed, the utility submits another application to the NRC for an operating license. The applications for both the construction permit and the operating license include a detailed description of the proposed design and operating procedures, an accounting of the financial situation of the utility, an environmental report, and a preliminary safety-analysis report (PSAR). A preliminary review of the application is made to determine if the application is complete. This mini-review includes a study by the NRC of both the safety and environmental reports filed by the utility as well as an antitrust review by the U.S. Attorney General's Office. The antitrust review includes an assessment of antitrust prob­lems resulting from the licensing of a nuclear plant. When a favorable review is given by the Department of Justice, the NRC holds a hearing to ascertain whether the applicant's proposed activities are in conflict with present antitrust laws or policies. Construction Permit. The process for obtaining an NRC construction permit for a nuclear power plant involves these steps (corresponding to the explanatory numbers in Figure V-3): (1) The utility submits its application for a construction permit to the Director of Regulation, NRC, who in tum distributes the application to the NRC's Directorate of Licensing and the public. The public is notified via news releases, the Federal Register, and the Public Documents Room. Local and state officials of the state in which the proposed plant is to be located, as well as governors of neighboring states, are notified by mail that an application has been received. (2) The Directorate of Licensing directs the technical review of the application, with most of the review conducted by national laboratories. The Directorate of Licensing meets with representatives of the utility, the nuclear supply-systems manufacturer, and others involved in the process, to discuss the plant design. (3) The Directorate of Licensing circulates a draft Environmental Impact Statement on the proposed plan to other federal agencies (as required by NEPA) and to the governor of the state in which the plant will be built. (The governor in turn distributes it to interested state agencies for review and comment. The agencies have 30 days within which to make their comments to the governor, whose office coordinates the comments into a single, state response.) After having reviewed the draft EIS, the federal agencies and the governor direct their comments to the Directorate of Licensing for inclusion in the final EIS. (4) When the NRC Directorate of Licensing completes its review, its comments are sent to the Office of the NRC's Director of Regulation, which in turn submits it to the NRC Commissioners. (5) As the Directorate of Licensing completes its review, E,nergy in Texas Volume I FIGURE V-3 NRC CONSTRUCTION PERMIT PROCESS Utility Submits Application 1 KEY I I Federal Agency ( r Federal Judicial Court ( ) State Office •tf no further appeal ii sought, a construction permit will be aranted. Comtruction will then begin and ii will be monitored by the Director of Resulatory Opentions ,______ Findings made public EIS, FSAR Appl., ACRS Findings Hearing Board granted Appeal? denied No 7 Yes ______...;...;__,. ASLAB granted Appeal? d;.;en""i""ed"--_____N_o.i 8 "Yes NRC Commissioners Operations monitors 13 operation denied Gopemment /nvolvemau the application is reviewed by dte Advisory Committee on Reactor Safeguards (ACRS). The ACRS is an independent, statutory body which reviews the safety of the reactor. The ACRS furnishes its review in the form of a letter to the NRC Commissioners which becomes part of the public record. The Office of the Director of Regulation then formulates its final position with regard to the license application, taking into account recommendations from the ACRS. The findings of the ACRS and of the Directorate of licensing are submitted to the NRC Commissioners. (6) A public hearing is required prior to the issuance of a construction permit (42 U.S.C. § 2235 (1970)). A pre-hearing conference is first set up to identify the parties in the proceeding, the issues in dispute, and the proposed witnesses. The Atomic Safety and licensing Board (ASLB) then conducts the official hearing. The ASLB consists of two technical persons and an attorney who chairs the hearings board. The hearing is usually held at the site of the proposed power plant. The ASLB receives testimony from state and local officials, community groups, private organi­zations, individual citizens, the applicant and its consul­tants, and NRC staff. It also reviews the permit-application file, which consists of the application and all evaluations and comments from interested parties. The ASLB issues the initial decision to either grant or deny the construction permit. If the permit is granted, it may be granted by the NRC on the basis of the decision by the ASLB. (7) If no exceptions to the ASLB's initial decision are filed, that decision becomes the final decision of the Nuclear Regulatory Commission. If exceptions are filed, they are reviewed by the Atomic Safety and licensing Appeals Board (ASLAB). The ASLAB, which is appointed by the commission, will either sustain or reverse the initial decision of the ASLB. If the construction permit is granted and no exceptions are filed, the initial decision becomes final. (8) The review by the ASLAB is usually the point at which the administrative process for granting a construction permit ends. However, the NRC commissioners can review particular issues on their own initiative. (9-11) Final opportunities for appeal are to the U.S. District Court of Appeals, the U.S. Court of Civil Appeals, and the U.S. Supreme Court. Once a construction permit is granted, the utility can begin construction. (12-13) Throughout the period of construction the power plant is monitored by the Office of the Director of Regulatory Operations, NRC, which insures that the utility constructs the plant according to the specifications in the construction permit. (14) There is no fixed schedule for determining how long this process will take. One estimate, however, is that the process spans approximately 10 years: Environmental Report and PSAR completed by the utility Date of permit application to start of hearings Hearings Construction of plant 2-3 years I* years *year 3-5years Operating License. The process for obtaining an NRC operating license for a nuclear power plant consists of these steps (corresponding to the explanatory numbers in Figure V4): (14) Initial procedures for obtaining an operating license are essentially the same as for obtaining a construc­tion permit. (5) The operating license procedure requires a more vigorous safety analysis by the ACRS. (6-8) Procedurally, after a favorable review by the regulatory staff and the ACRS, the commission must publish a notice of intent to issue an operating license to the applicant, giving at least 30 days advance notice. This notice informs the public of the position of the NRC and the ACRS. It also states that any person whose interest may be affected by the proceeding may petition the AEC to hold a hearing. A public hearing need not be held. If no hearing is requested, the NRC issues an operating license to the utility. If a request is received for a hearing, and if it is granted, the hearing process is similar to the hearing process for a construction permit. (9-11) The appeals process is similar to that for the construction permit. (I2-13) After an operating license has been issued, operation of the plant is monitored by the Director of Regulatory Operations, NRC, to insure compliance with specifications set forth in the license and other NRC regulations. Before a permanent operating license is granted to a utility, a temporary operating license is issued. In this manner the Nuclear Regulatory Commission can better control the operation of the nuclear power facility. (14) Again, there is no fixed schedule for this phase. However, the Director of Licensing, NRC, has estimated the process takes about 16 months (O'Leary, 1972). "Energy in Texas Volume I FIGUREV4 NRC OPERATING LICENSE Utility Submits Application Public Notifiaition findings EIS EIS Review applic. EIS,FSAR, &appl. FSAR ------male 3 draft EIS 2 3 comments draft EIS Director of Licensing Reactor Projects Tech. Review Fuels & Materials public 4 Federal Agencies NRC Commissioners State Governor's granted Protest? denied No Office comments 6 Yes ASLB Hearing Board KEY ~----~I Federal ~ncy (,______(~ Federal Judicial Court (,______) State Office granted Apeal?* _d_e_n_ie_d____N_o__-tlot 8 granted denied No Appeal? ---------.i 8 Yes NRC No Appeal Commissioners an operatin1 license wil1 be granted. Operation will then begin and it will be monitored by the Director of Regulatory granted Appeal? _d_e_n_ie_d Operations. •1rno further appeal is sought. 9 temporary ____N_o__-.i denied No denied No operating permit Director of issued Regulatory permit Operations denied 13 Operating monitors operation License Denied Siting Fossil-Fuel Power Plants in Texas The siting of a fossil-fuel power plant in Texas requires permits from both state and federal agencies. There is, however, no one federal agency that licenses the construc­ tion of these plants as the NRC does for nuclear power plants. In fact, prior to the 1972 federal Water Pollution Control Act Amendments (WPCAA), no federal agency required environmental impact statements for the siting of fossil-fuel plants. Although this policy is changing as a result of the WPCAA, federal agencies requiring permits continue to consider only environmental impacts of the plant and fail to adequately review other siting issues. These are the steps an electric utility must take to construct a fossil-fuel power plant in Texas corresponding to the explanatory numbers in Figure V-5): (I) After conferring informally with the Texas Water Development Board over state water availability and the potential environmental impact of the plant, the utility submits applications to the Texas Air Control Board and the Texas Water Quality Board (seeking air-emission and water-discharge permits, respectively), as well as to the Texas Water Rights Commission (seeking legal rights to state water needed for the operation of the plant). The utility also submits permit applications to the regional offices of the COE (for authorization to dispose of dredge-and-fill materials) and the EPA (for authorization to dispose of certain plant effluents). (2) The utility confers with the Texas Highway Depart­ment, the Texas Railroad Commission, and the Texas General Land Office to determine whether additional permits might be required. Consultation with the Texas State Health Department to insure that state health standards would be adhered to during the construction Of .. the plant also occurs. (3) After a state agency denies or grants its permit to the utility, the utility or an intervenor in the hearings process can appeal the agency decision to the District Court of Travis County, the Texas Court of Civil Appeals, and the Texas Supreme Court. An appeal of the decision of a federal agency (i.e., COE or EPA) can be made to the federal courts having corresponding jurisdiction. (4) The utility may begin construction of its fossil-fuel power plant after it obtains all required state and federal permits. Siting Procedures in Other States The problems of environmental destruction and decreas­ing electric-power reliability have led to state and federal interest in regulation of power-plant siting. State responses to problems of power-plant siting have resulted in a variety of procedures, a cross section of which will be considered in this section. Government /nvolveme,, In the past, power-plant siting, if regulated at all, has been subject primarily to local zoning laws. Most states have been mainly interested in protecting the consumer by regulating rates. Although most states have state utility commissions with some authority to regulate investor­owned electric-utility systems, less than one-half have had authority to regulate publicly owned and cooperatively owned systems (Fl>C, National Power Survey, 1970). Recently the concern of the states has shifted from the relationship between the utilities and the consumer to the relationship between the utilities and the environment. The National Association of Regulatory Utility Commis­sioners (NARUC), recognizing the need for state considera­tion of environmental factors in power~plant siting, pro­posed a Mod;l State Utility Environmental Protection Act in 1970. Many states have adopted the important features of the act. The principal provisions of the NARUC Act are delineated in Appendix A. Since a nurriber of these features is common to all proposed federal legislation concerning power-plant siting, Table V-1 is included to illustrate the extent to which these elements have been incorporated into state siting proce­dures. The control features summarized in Table V-1 are included in most pending federal siting legislation and are regarded as vital to the protection of the environment and to electric reliability. Power plants and transmission lines have a considerable impact on the environment, and their construction should not be permitted without first pro­viding for (1) long-range plans by the utilities and the state government to insure the time necessary to study possible implications of the proposed sites; (2) environmental re­view and assessment of proposed construction by qualified state agencies; and (3) public hearings to allow citizen participation in the siting of power plants . Environmental review is now a requirement imposed by federal pollution-control legislation. It is assumed that all states have complied with these acts; however, NA (Not Available) was used in Table V-1 if positive knowledge of compliance was not available. Environmental review and public hearings appear to be accepted in most states as legitimate controls for power-plant siting. Unfortunately, many states have not recognized the vital need for future provision of electric power in their state. These states require neither long-range planning for electric power nor certification of power plants and transmission lines. A few states have established a land-use agency in order to ensure the proper future use of land in their states. Environmental considerations have led to involvement in the site-selection process by many groups. The delays and added costs to power-plant construction due to this volume of input has made a one-stop site-selection procedure increasingly more desirable. The coordination by one FIGUREV-5 AN OVERVIEW: LICENSING PROCEDURES FOR THE CONSTRUCTION OF FOSSIL-FUEL POWER PLANTS application permit 0 of Engineers permit granted I I I Appeal? l application permit denied I I er c::) GIB em application C) KEY Utlllty Federal As•ncy State JudJc:ill Court State Aaency P1tmll Required Permit M laht Be Required O.pendlna on P&ant Spectncatlon1 No Permit Required , Review of Plant Speclflcatlon1 Only 4 ~ authoriud to construct application - 8 application application application 2 application contract •Joint permit expected In the future: on• permit from W1ter QU1Hty Board expected ultlm11ely with veto powers retained by EPA. ~·· ~· s· ~ ~ ~ ~ ~ ...... Go1'emment Involvement TABLE V-1 STATE POWER PLANT SITING CONTROl.S Certification Long range: required for Public I-stop plans State State construction of ......--­----­Power Transmisfilon hearings required Environmental review· siting procedure (by state and/or land-use agency plants line utilities) Alabama y y y NA N NA NA Arizona y y y y y y NA Arkansas y y y y N NA NA California y yl y y N y y Colorado yl yl y y N N y Connecticut y y y y y y N Delaware N N N y N NA NA Florida N N N y N NA y Georgia N N N N N NA NA Idaho y y N NA N NA NA Illinois y2 y2 y y y N NA Indiana N N N y N NA NA Iowa N yl yl y N NA NA Kansas y y yl NA N NA NA Kentucky y y y y N NA NA louisiana N N N y N NA NA Maine y y yl y N N y Maryland y y y y y y N Massachusetts yl yl y y N NA NA Michigan N N N y N NA NA Minnesota y N y y N NA N Mississippi y y y y N NA NA Missouri y y y y N NA NA Montana N N N y N NA NA Nebraska N N y y N NA NA Nevada y y yl y y NA NA 1Required under certain circumstances 2Nuclear power plants only Sources: Southern Interstate Nuclear Board, 1972. Electric Power and the Environment, U.S. President, Office of Science and Technology, 1970. Association of the Bar of the City of New York, Special Committee on Electric Power and the Environment, Electricity and the Environment, West Publishing Co., St. Paul, Minn., 1972. Correspondence with state government officials from California, Maryland, New York, and Oregon. Energy in Texas Volume I TABLE V-1 (continued) Certification Long range required for plans State I-stop Public construction of (by state State land-use siting hearings Environmental and/or Power Transmission agency procedure required review utilities) plants line y y y y y y NA New Hampshire y y y NA N N New Jersey NA y y y y y NA NewMexico N y y y y y y y New York y y yl NA N North Carolina N NA y y y N NA North Dakota N NA y N NA 0hio N N N NA N NA 0 klahoma NA N N NA N y y y y y 0 regon N N yl p y y y NA ennsylvania N NA y y y y NA Rhode Island N NA y y y NA south Carolina N N NA y y N NA NA SouthDakota N NA y yl y y NA NA Tennessee N y y y y NA utah N NA y y y y y y vermont N y y y y NA virginia N NA y y y y y y washington N y y y y NA N west Virginia NA yl yl y y y NA wiscon sin NA y y y y y y NA wyarning Government /nvolveme agency of all reviews should increase the efficient pro­cessing of a construction permit for a power plant or transmission line. Table V-1, however, shows that only one-third of the states have established such an agency. In order to better understand the features of other states' procedures that might be utilized in Texas, the activities of six representative states will be more closely examined. Arizona. The Arizona Power Plant and Transmission Line Siting Committee was established by law in 1971 . The committee is composed of the directors of state agencies with a particular interest in power plants and transmission lines sites-i.e., the pollution controls boards and the Land Commission-and seven members, appointed by the Corporation Commission, who represent cities, counties, and the general public. The attorney general is the chairman. A utility must file with the Corporation Commission an application for a certificate of environmental compatibility before construction of a power plant or transmission line. The commission refers the application to the committee, which holds hearings and then approves, denies, or modifies the application. A certificate must be affirmed and ap­proved by an order of the commission. Any party to a certification procedure may request a review by the commission, whose decision is final. This siting procedure incorporates many desirable fea­ tures, including obligatory annual submission of 10-year plans by the utilities. However , other state or local conditions imposed on power-plant sites are permitted, except where the committee deems them "unduly restric­ tive" or "not feasible in view of technology available". The only other NARUC considerations not included are pro­ posed additions to plant facilities and a definition of "construction" which would include site preparation. California . Thirty months of public resistance to a nuclear power-plant site proposed in 1961 by the Pacific Gas and Electric Company prompted consideration of a policy for siting power plants in California. In 1964, the Administrator of the Resources Agency appointed an ad hoc Power Plant Siting Committee. In 1965, the State of California Policy on Thermal Power Plants was developed. This was revised in 1969. The routine followed by the Power Plant Siting Com­mittee, which is composed of representatives from eight agencies within the Resources Agency and a representative from the Department of Public Health, included a meeting with the utility, resulting in a signed agreement. The utility generally agreed to take certain actions to protect the environment and the Resources Agency agreed not to oppose the utility application for a certificate. However, because one of these agreements was ruled void and unenforceable in 1972, no further agreements have been signed. The State Policy on Thermal Power Plants set forth two specific policies pertaining to thermal power plants: (1) the policy to ensure the protection of the environment and the public, and (2) the policy "to encourage the use of nuclear energy". Specific considerations implementing these poli­cies were enunciated in the statement, providing operating guidelines from the siting committee. However, three developments prompted the secretary of resources to withdraw this policy on January 12, 1973: a) in 1970, new environmental laws formalized the agency consultation process; b) the creation of seven coastal commissions empowered to suggest environmental controls on coastal development, which constitutes a partial duplication of the activities of the siting committee; and c) the expectation of new power-plant siting legislation. At present, the Public Utility Commission issues Certifi­cates of Public Convenience and Necessity for the construc­tion of generating facilities and transmission lines, backed up by an environmental evaluation by the Resources Agency. Although California was one of the first states to address power-plant siting nad environmental concerns together, the legislature has not yet formalized a one-stop siting procedure. Maryland. The Maryland Power Plant Siting Act, enacted in July, 1971, emphasizes long-range planning by the Maryland Public Utility Commission and the utilities. Implementing this program involves action in three areas: general research, monitoring, and site evaluation. The most unusual feature of the act, however, is the authorization for site acquisition. The Public Service Commission is directed to evaluate the annual, 10-year plans submitted by the utilities, and forward a 10-year "plan of possible and proposed sites" to the secretary of the Department of Natural Resources. The Department of Natural Resources is directed to determine the environmental impact of each proposed site, with a detailed investigation of the acceptable sites. Also, the secretary of the department is empowered to acquire for the state desirable sites sufficient to satisfy future requirements and to hold these sites until needed by a utility. The number of sites retained is to remain between four and eight. Revenue for the implementation of the act is obtained by a surcharge per KWH on electricity, to be deposited in an environmental trust fund. The certification procedure is a one-stop process. The Public Service Commission (PSC) may grant, deny, or modify an application from a utility for a Certificate of Public Convenience and Necessity after a public hearing and after receiving recommendations from certain state agencies, including the Departments of Natural Resources, State Planning, and Health. However, "the highly visible utility planning and environmental _....,in Texa.Volume I . research called for by the legil)ation is'·not necessarily tied to the actual site-certification -process. . . . . The ,~xclusive use of sites upon',Wllich the Department of Natural Resources has pubuShed a detailed environ­ . mental statement would successfully coordinate the functions of the Fund and the PSC siting proce­ dwe..." (The Association of the Bar of the City of New York, 1972). · Although it seems evident that the legislature intended that only sites approved by the Department of Natural Resources be used by the utilities, this requirement is not written into the statute. This lack of statutory coordination should be corrected to prevent undesirable consequences. Another principal deficiency of the act, the lack of requirement for public input until the application for a certificate, might be eliminated by providing for public hearings on sites which the secretary finds acceptable. New Hampshire. A number of state power-plant siting acts, as well as the NARUC Model State Act, neglected to provide for public participation before the certification pro~ss. New Hampshire is one of few which has provided for early public participation. This state's approach to power-plant siting, although involving two separate agencies, is essentially a one-step process. The Public Utilities Commission (PUC) grants the Certificate of Site and Facilities, with input from the Site Evaluation Committee. The committee was established in 1971 and is_composed of about 13 members representing interested state agencies. The committee performs two major functions: First, it reviews and comments on the utilities' long-range plans and conducts hearings on plant sites identified five years in advance of construction. Second, the committee holds joint hearings with the PUC within six months of the receipt of an application for a certificate. Before granting a certificate, the PUC must consider two criteria in addition to accepting the site comniittee's findings: (1) the facility must be required for present and future reliability, and must not adversely affect system stability and reliability, and (2) economic factors. A counsel for the public, appointed by the Attorney General, represents the public interest in questions of environmental quality and electric-power reliability. The hearings on sites identified five years in advance of construction provide early public participation in the siting process. Open discussion on proposed sites this far ahead of construction serves to deal with most objections to the facility and thus minimize costly construction delays. When public hearings are postponed until an application is made for a construction permit, public protest is generally more vocal and more determined, possibly because the area's citizenry suspects the utility of secrecy in an attempt to force the acceptance of the site. New York. A noteworthy aspect of New York's siting procedure is the provision for coordination between the Public Service Commission (PSC) and other state , local, and federal agencies. Chapter 385 of the State Statutes excludes steam electric-generating facilities "over which any agency or department of the federal government has exclusive jurisdiction, or has concurrent jurisdiction with that of the state and has exercised such jurisdiction". The statute also permits the chairman of the PSC to enter into an agreement for a joint hearing with an agency of the federal govern­ment which has concurrent jurisdiction over the facility. These two provisions thus prevent needless duplication in the siting process. The certification process in New York is similar to other states, except that certification of transmission is done through the PSC, whereas the certification of a generating site is done by the Siting Board. The Siting Board, established by Chapter 385, is composed of the Commis­sioners of the PSC, Environmental Conservation, Commerce, and Health, and an ad hoc member from the judicial district where the proposed site is located. Public participation is insured throughout the siting process by the requirements for public hearings. A public hearing must be held for each application for a certificate for environmental compatibility and public need; in addition, each utility must submit 10-year plans to the Department of Public Service at a public hearing. Intrastate duplication is avoided by two provisions. The Siting Board may refuse to apply any local law which the board determines is "unreasonably restrictive in view of the existing technology or the needs of or costs to consumers". In addition, no other state agency or municipality may require approval or permits of a utility, excepting the application of state laws for employee protection. Two additional state agencies provide for comprehen­sive, statewide planning for adequate energy. Chapter 386 created the Legislative Commission on Energy Policy for the State of New York to formulate "recommendations regarding a comprehensive, rational energy policy". The state's Atomic and Space Development Authority is author­ized to select, acquire, and furnish, through sale or lease to utilities, sites for nuclear power plants. Public participation is again permitted prior to a decision on a site. New York's statutory provisions for power-plant siting and land use are perhaps the most extensive in the nation. All the major features of the NARUC bill have been included, as well as some additional desirable features. The one major criticism of the process might be directed at the separate certification procedures for generation and trans­mission of electricity. Oregon. The Nuclear and Thermal Energy Council, composed of the public utility commissioner, the state engineer, the state health officer, the director of environ­ mental quality, and five members appointed by the governor, was established on June 30, 1971. The council Government lnvolveme,. receives notices of intent (which utilities must file at least 12 months prior to submitting an application for a site certificate); receives applications for site certificates; sends copies of the notices of intent and of the application to interested state agencies for comment and recommenda­tion; holds public hearings on the applications for site certificates; coordinates and cooperates with other state, local, and federal government agencies; monitors plants, installations, and intrastate transportation of radioactive material; reduces or curtails operation ifit determines there is danger to the public health and safety; and sends its recommendation on granting certificates to the governor, who is the final authority over site applications. However, the governor's authority is limited to the power to approve or reject a site certificate submitted by the council; he cannot execute an application rejected by the council. The noteworthy features of Oregon's statute include the annual fee required of the utilities, the designation of the governor as the final authority, and provisions for the council to take immediate action if it determines that danger to the public health and safety is imminent. Also, a statewide siting-survey task force has surveyed the state and classified potential sites into those that are suitable, less suitable, and unsuitable for siting thermal or nuclear power plants. Activities ofOther States. A number of other states have passed legislation that closely parallels many provisions already discu~d. Vermont was one of the first states to enact regulations for siting power plants. In its 1969 bill, certification with environmental limitations was required for generation and transmission facilities. Maine, in 1971, prohibited construction of electric-utility facilities without a certificate of public convenience and necessity from the Public Service Commission. Nevada also passed legislation in 1971 requiring a permit from the Public Service Commission, but a hearing is required only if a protest is filed against the permit by an interested party. New Mexico's 1971 law requires construction and location permits by the Public Utility Coinmission. The environ­ mental limitations are the existing air and water pollution­ control standards, and the commission's finding that the "location will [not] unduly impair important environ­ mental values". In Pennsylvania, a certificate of con­ venience is required only when a site is not zoned for such a use by the local zoning board. In Virginia the State Corporation Commission is required, since 1972, to give consideration to the environment and assure minimization of environmental impact when approving construction of an electric-utility facility. Wyoming requires certificates of public convenience and necessity from its Public Service Commission and public hearings for sites of plants and transmission lines. However, environmental considerations are under the purview of other departments. The Illinois Environmental Protection Act of 1970 established an elaborate and comprehensive structure but does not address power-plant siting specifically, dealing with them instead in the context of potential sources of pollution. Interest in the problems of power-plant siting has also resulted in other types of activity. In Tennessee and Massachusetts, for example, special commissions are investi­gating power-plant siting. Policy Implications and Alternatives. Investigations of various states' activities and the NARUC bill suggest specific administrative and procedural issues that should be considered by states (such as Texas) that may be contem­plating changes in their power-plant siting procedures. These features include: (I) Administrative Composition of One-Stop Siting Agencies Most states having a one-stop siting procedure prefer to delegate siting responsibility to a commis­sion composed of heads and/or representatives of relevant state departments (examples include Connecticut and Oregon). Remaining states with one-stop siting agencies have delegated siting responsi­bility to their public utility commission. (2) Long-range Planning Long-range planning, basic to any siting procedure, varies among the states. The most common provision requires annual, long-range plans, usually encompas­sing a ten-year period, by utilities (examples include Arizona and Oregon). A few states have implemented statewide planning for power-plant siting (examples include California, Oregon, and New York). New York and Maryland have provided for state acquisi­tion of possible power-plant sites, with sites made available to utilities as needed. (3) Notice of Intent; Early Public Participation Oregon requires that an electric utility file a notice of intent to construct a facility at least one year prior to the submission of a site application. This require­ment helps to generate early public awareness of the project. Furthermore, input by the public before the filing of a site application provides for early settle­ment of possible disagreements between utilities and the public. (4) Approval by Governor Washington and Oregon require gubernatorial approval of power-plant applications before the siting agency can issue a certificate. (5) Emergency Action by the Siting Agency Oregon's siting procedures include a provision for immediate action by its regulatory council when "there is a violation of a safety standard or danger from the continued operation of a plant or installa· tion". The council is authorized to reduce or curtail operations if it is deemed necessary. (6) Coordination with Other Government Agencies Many states face the problem of overlapping federal, state, and local jurisdiction over power-plant Energy in Texas Volume I siting. In order to mitigate this problem, several,$tat,.s -,) have developed siting procedures which include prb-' visions for determining where ultimate power-plant regulatory authority lies. Such provisions work to lower costs incurred through duplicatiol\ . .i . Whether these presently optional features will be trans­ . ' fo;m~d into statutory requirements by future federal legislation remains to be seen. But whatever the federal government may choose to do, it will have the experience of a number of states upon which to rely. REFERENCES ,1 1. Southern Interstate Nuclear Board, Power Plant Siting in the U.S.: 1972-A State Sum~(2nd Rev. Ed.), Atlanta, Georgia, September, 1972. 2. The As&ociation of the .Bar of the City of New York, Electricity. and the ,En_vironment, West Publishing Co., St. Paul, 1972. 3. U.S. Office ofScience and Technology, Electric Power and the Environment, U.S. Government Printing Office, Washington, D.C., 1970. 109 APPENDIX V-A MODEL STATE-UTILITY ENVIRONMENTAL PROTECTION ACT SUMMARY OF THE NATIONAL ASSOCIATION OF REGULATORY UTILITY COMMISSIONERS ACT: (1) Provision for one-stop, siting procedures, with the public service commission serving as the agency involved. (2) Requirement of certification for the construction of any major utility facility. (3) Requirement for public hearings to be held by the public utility commission upon the receipt of an applica­tion for a certificate. (4) Indications of the options open to the public service commission, e.g., the granting of a certificate, the denial of an application, or the conditional granting of a certificate. (5) Provision for rehearings and for judicial review, with limitations stipulated. (6) Prohibition of public service commission action where a federal agency has exclusive jurisdiction. (7) Provision for the public utility commission to cooperate and coordinate actions with other state and federal agencies, particularly where concurrent powers exist. (8) Provision for the nullification of other state, local, or regional agency's conditions which might have been applied to the construction, operation, or maintenance of a major utility facility already authorized by a certificate. The NARUC Act includes certain requirements not found in the 1970 Model State Act: (1) long-range planning by the utilities, (2) disclosure of construction sites and plans one year ahead of proposed construction, (3) disclosure of proposed sites five years in advance of construction, and (4) required public hearings on the five-year plans. CHAPTER SIX PUBLIC PARTICIPATION IN THE SITING OF ELECTRIC POWER-GENERATING FACILITIES Until recently, public participation in eleCtric-power decisions was confined largely to individuals and groups seeking more adequate compensation for a utility's exercise of eminent domain or those who challenged proposed rate increases. The emergence of environmental concerns and increasing anxiety about nuclear power generation have greatly expanded the public's traditional role. Today, public interest groups take full advantage of the administra­ tive process to challenge power-plant siting decisions as well as the responsiveness of regulatory agencies in protecting public health and safety. Two arguments have become the focus of public participation as an element in policy decisions: (1) its role as a vital part of the democratic process, and (2) its hindrance ' to the speed and efficacy of agency operations. The democratic argument is based on the assumption that decision making must be responsive to the interests of widely representative groups and that arbitrary action in policy planning is unacceptable (42 U.S.C. 145 (1) (a), 1965). The hindrance argument, on the other hand, regards public participation as an imposition on the time, energy, and ingenuity of administrative agencies and their capacity to respond to public needs (South West Law Journal, 1970). Both arguments represent extreme positions and are not addressed to the specific circumstances of power-plant siting. Power-plant siting is a process of great complexity, since it represents the merger of both public and private interests. Moreover, it not only involves the traditional economics of site acquisition (i.e., inexpensive land with an abundance of cooling water and transportation facilities) but covers such matters as the impact of site development on future land use and the environment. There is considerable controversy, however, over the proper role of the public in site-identification and the designation of needed facilities. Power-system planning is highly technical and requires specialized knowledge. Yet members of the public will be affected by the economic, aesthetic, and environmental consequences of future system growth. It is therefore important that attention be drawn to those issues that affect the siting and development of electric power-generating facilities. This chapter provides a focus for discussing public participation in power-system expansion by examining the question of public representation; by describing barriers to participation; by analyzing public standing in the courts; • by investigating delays caused by citizen litigation; and by commenting on the electric-utility view of public involvement. WHO IS "THE PUBLIC"? The battle over the public's right to intervene has been extensively reviewed by the courts. The questions that now arise are: How far does this right extend? Who may represent "the public"? Jerre Williams has attempted to define "the public" by delineating four generic groups or attitudes that are represented in decisions regarding the location of major public facilities (Williams, 1972). The first group is composed of persons immediately affected by a proposed project (e.g., those living in the vicinity of the project). A second group is made up of ecologists who have no self-interest but who are genuinely concerned with environmental protection. A third group consists of com­mercial developers and businessmen. The fourth group is the general public, which enjoys a high standard of living and does not wish to sacrifice it. Other configurations of "the public" also exist, in­ cluding the poorer inner-city inhabitants who are interested in cheap electric power and academics who are perhaps more concerned with preserving a democratic selection procedure than with the generating site itself. The crucial point, however, is that power-plant siting issues may induce a variety of public groups to seek an active role in their resolution, each with a different purpose. As a matter of practice , decisions regarding what group will be represented in administrative and judicial forums has been left almost entirely to precedents established by federal and adminis­ trative law judges. 111 ruo11c rarnc1patio1. BARRIERS TO PUBLIC INTERVENTION Citizen participation can inform agencies and aid them in making wiser decisions. The traditional forum has been the public hearing, held by specific federal and state agencies before permits can be granted for the construction and operation of power plants. At the federal level, these agencies include the Nuclear Regulatory Commission, the Environmental Protection Agency , and the Army Corps of Engineers, and at the state level, the Texas Water Quality Board, the Texas Water Rights Commission, and the Texas Air Control Board. Hearings must also be held by the Texas Highway Department and the Texas Railroad Com­mission if permits from these agencies are required. Although opportunities exist for public participation through the hearing process, a number of factors deter effective public input. These factors include insufficient expertise, the cost of participation, the lack of effective notice of hearings, and time. But the basic problem intervenors face is inadequate resources. For example, the cost of intervention against a power-plant applica­tion can exceed $100,000. While intervenors must raise the funds necessary for litigation from contribu­tions or foundation monies, the utility can recoup its litigation expenses through rates. In addition, the applicant is frequently aided by the regulatory staff, which, by the time the case comes to hearing, has often decided to support the application (The Association of the Bar of the City of New York, 1972). Five financial barriers to intervenor participation in the hearing process can be identified: Multiple-copy requirements of all documents sub­mitted by parties are required by some agencies. Transcripts are prepared by private reporting com­panies under contract with federal agencies. Copies are on file with the agency, but can only be used by attorneys in Washington, D.C., during business hours. The transcripts are usually made available by the agency a week or more after testimony is presented and cannot be copied, thereby reducing their useful­ness. Daily transcripts are helpful to attorneys for cross-examination and cost approximately $1.38 per page in Nuclear Regulatory Commission proceedings (The Association of the Bar of the City of New York, 1972). Agencies receive free copies of the hearings. Information made available to the public is often disorganized. Intervenors waste effort gathering infor­mation. Expertise is costly and usually not available to intervenors with limited resources. Many experts are employed by the government and are unable to assist or testify on behalf of the intervenors. As a result, public testimony usually falls short of expert testi­ mony. Legal fees are the most costly aspects of public intervention. Counsel is required to be present at all stages of litigation. This increases costs when inter­ venors are only contesting a few issues. Lack of effective notice also hampers public participa­tion. Present notice requirements (e.g., Federal Register, newspapers with a general circulation in the area) may not adequately alert interested persons. Moreover, Time problems further magnify the inequalities of resources and information. The applicant has years to prepare its application and muster its case. Federal commissions have almost that long. But, intervenors usually have only three weeks, or at most three months, in which to decide to intervene, raise the necessary funds, and marshall a case-often with inadequate, volunteer technical resources (The Asso­ciation of the Bar of the City of New York, 1972). PUBLIC STANDING Defined as the right of a citizen to challenge the actions of the federal government in the courts, standing embodies certain qualifications. The view has been widely held for the past half-century that the courts could not withstand an open invitation to citizens to participate in judicial pro­ceedings contesting past or proposed federal action. Yet, the past decade has witnessed an increased concern for en­vironmental matters that has led to greater demands for public participation in all aspects of federal decision making, including standing to review federal administrative action. Prior to the mid-1960s, standing was granted only to those who could claim the existence of these conditions: an adversary condition capable of judicial review and remedy as defined in Article III of the Constitution; the claimant had suffered economic injury and could identify the cause of such injury as resulting from federal action; provision under a relevant federal statute. Basically these conditions remain in effect today. How­ever, since 1965, with only one exception (Sie"a Club v. Morton, 1972), they have been consistently broadened through liberal interpretation by the courts to allow more interested persons standing to ·participate in the review of government decisions. Article III of the Constitution restricts the judicial power of review to "cases" and "controversies". The question of standing relates to whether the dispute would be presented in an adversary context capable of judicial resolution. The fundamental test for "case" or "contro­versy" is whether the claimant alleges direct injury. Initially, direct injury meant direct economic injury, but ,Energy in Texas Volume I with the proliferation of electric-power facilities and environmental concerns, the courts in 1965 expanded the concept of standing to include those who seek to protect the public interest in aesthetic, conservational, and recrea­tional aspects of power development (Scenic Hudson Preservation Conference v. FPC). Thus, economic injury was given broader significance in terms of the environment and the individual. In 1966 the concept of standing and the public interest was further broadened in Office of Com­munication of United Church of Christ v. FCC, which held that standing should be given to persons intending to protect the public interest as well as their own private interests. Liberal interpretations toward granting increased public participation in judicial review proceedings of government actions did not cease here. In 1967, towns, local civic organizations, and conservation groups were given standing (Bedford v. Boyd), and in several cases in 1970 standing was afforded associations to represent their members in judicial proceedings, contesting federal adminis­trative action (Data Processing v. Camp, Hudson Valley v. Volpe, Environmental Defense Fund v. Harden, Sie"a Club v. Hickel). It was then stated that an organization whose members are injured may represent those members in a proceeding for judicial review. The statement was emphatic that mere organizational interest was not sufficient. In 1972, with the Mineral King Case (Sie"a Gub v. Morton), the progressive liberal interpretation of standing hit a snag. The courts ruled that the Sierra Club had failed to allege that it or its members would be directly affected by proposed government action, and thus denied it standing. This decision has the effect of reinforcing direct injury as the basis of standing to protect the public interest. The final standing qualification is that the review must be authorized under a relevant federal statute which generally describes petitioners as "aggrieved" or "adversely affected" by government action. For example, one of the two most widely applied statutes, the Federal Power Act (FPA), states that any party to a proceeding under this chapter ag­grieved by an order issued by the commission in such proceeding may obtain a review of such order in the United States Court of Appeals for any circuit wherein the license or public utility to which the order relates is located. The Administrative Procedure Act (APA), even more widely used than the FPA, is intended to assure comprehen­sive review of a broad spectrum of administrative actions, including those made reviewable by specific statutes with­out adequate review provisions as well as those for which no review is available under any other statute (5 USCA § 706). The APA is not applicable to the extent that (1) statutes preclude judicial review, or (2) agency action is committed to agency discretion by law (5 USC § 701 (Supp. IV)). Currently, standing is granted to those who can claim the existence of at least one of four conditions: an adversary condition capable of judicial review and remedy as defined in Article III of the Constitution, the claimant must assert injury in fact to the interest he wishes to protect and must identify the cause of such injury as resulting from federal action , review must be authorized under a relevant federal statute, a demonstrated capacity to represent the interest must be proved. While the last word on standing to challenge federal action has not been spoken, it is clear that the public interest has gained a point of access to the administrative decision-making process. It is equally clear that the same point of access has not been acquired in the area of private conduct affecting the public interest-a problem that will surely draw increasing attention. A final concern is expressed and an alternative to standing offered by Christopher D. Stone, who asserts that a guardianship approach may be preferred to standing (Stone, 1972). He writes that one ought to handle the legal problems of natural objects as one does the problems of legal incom­petents . . . Someone is designated by the courts with the authority to manage the incompetent's affairs . .. On a parity of reasoning, we should have a system in which, when a friend of a natural object perceives it to be endangered, he can apply to a court for the creation of a guardianship. Mr. Stone is not the only one to assert legal rights for natural objects, but activation of the concept of guardian­ship or the elimination of the concept of standing seems a long way into the future-if, indeed, it ever comes. DELAYS Litigation has resulted in increasing delays in the licensing process of electric-power facilities. This can have a significant impact upon the availability of electric power in the area of the proposed site. Although intervenors do have a legitimate role in the process, the participation should not be given any more emphasis than that given to the private sector. Thus, a process which gives intervenors the discretion to delay the licensing of a needed plant is no more satisfactory than a process which keeps them from making their arguments effectively and submitting them for decision to a body charged with protecting the public interest (The Association of the Bar of the City of New York, 1972). All parties have their own view about the causes of delay. Utilities see intervenors as the source of delay. To Public Participatim the intervenor, the administrative process is the bottleneck. However, analysis shows that the infirmities of the decision­making process are the real cause of delay. For example, since the NRC staff is overworked and rarely receives complete utility permit applications, intervenors find it difficult to get information before hearings. Delay has a considerable impact upon utility decision making. Many utilities have dropped plans to construct power plants where they expect environmental interven­tion. These power plants will therefore be built at sites where environmental opposition is less likely, but the environmental impact may be no less. It is also possible that older, less-efficient power plants will be kept in service in order to avoid building new ones. The FPC and the utility industry predict an increased number of delays because of environmental concerns. Most delays occur at the federal level, even though more state and local permits are required to build an electric power plant. These delays will result in an elongation of the licensing process. Licensing delays inject a new element of uncertainty into the process, and may significantly alter the availability of electric power in the area of the proposed site. PUBLIC INVOLVEMENT AS VIEWED BY THE ELECTRIC-UTILITY INDUSTRY Public participation is often confused with other pro­cesses associated with decision making. John K. Boyton delineates four processes: (1) Information-telling people what is to happen, (2) Persuasion-explaining to people why they should like what is to happen, (3) Consultation­asking people for reactions before a decision is taken, or sometimes after a decision is taken, and (4) Participation­some form of real involvement of people in the decision that is reached (Boyton, 1972). This section discusses the role of the electric-utility industry in educating the public and seeks to describe the industry's view of public inter­vention in power-plant siting decisions. Public Participation or Public Education? The utility industry believes it is not its role to accept the notion of public participation, and draws a distinction between public participation and public education. The supply of electricity to its customers is the major responsi­bility of utilities. A portion of that responsibility is informing or educating the public in the optimal uses of electricity and the location, safety, and environmental aspects of proposed power plants. Public input into the decision-making process is charac­terized as honestly motivated, but misinformed. The public is thought to generally lack the necessary expertise to grasp the complex issues surrounding power-systems planning, and utilities lack the time and capability to educate the public on the complex issues involved. Theodore J. Nagel, vice president for system planning, American Electric Power Service Corporation, has addressed this problem with unusual candor: Because of its highly technical nature, [power] system planning cannot be undertaken in an "open forum" without the risk of total confusion and interminable delay. While the interests of the public in specific siting proposals must be considered, the important question is at what stage of the planning process the public's views can be focused and intelligently brought to bear on the choice of power-plant sites. In my judgment, such public involvement can be most meaningful only after the utility has selected its sites and prepared in full its technical, economic, and environmental evidence for public review. Earlier involvement would result in useless rhetoric and an evasion of responsibility by the utility, with a resultant failure to meet its overall public obligation. It is unrealistic to assume that responsible deci­sions in the public interest can be made , and opposition to power-plant siting reduced signifi­cantly, by public and regulatory involvement in the earliest stages of utility planning before full study is made of alternative sites, of their suitability for power generation purposes, and of their possible environmental impact (National Academy of Engi­neering, 1972). Two questions the utilities raise are: • Who represents the public? · What is the purpose of intervention? An executive of a privately owned electric utility in Texas divided the public into four interest parties: environ­mentalists groups, the chambers of commerce, land owners, and academics. His company is in contact with three of the four interests from the beginning of the site-selection process. (Academics usually get involved at a later stage of the process). Other Texas utilities are also in contact with these four interest parties at various stages when planning a power plant. The Utility Viewpoint: The Role of the Public in Power-Plant.Decisions Utilities first interact informally with state agencies (e.g., Texas Water Quality Board, Texas Water Rights Commis­sion, Texas Air Control Board). Typically, these agencies are asked to render an opinion on a number of possible sites. After soliciting informal approval from a few state agencies, the utility begins to inquire about the price of the site. Public notification of the proposed site is withheld until the largest parcel of land is purchased, in order to avoid speculation. At this point, local environmental (and other) interest groups are notified about the details of the Energy in Texas Volume J plant. The utilities believe it is a good business practice, as .well as its ethical responsibility, to supply this information. Utilities are unsure about the purposes of intervention. They believe that delay does not make plant siting procedures more effective and power-plant operations safer; it merely increases costs. The utilities maintain that the public has ample opportunity for participation in the public hearings that are held by federal, state, and municipal bodies. The utility industry does not see the costs of interven­ tion as a burden that deters public participation. An executive of a privately owned Texas utility cited these examples to support his claim: (I) meetings between the NRC and the utility are ftled in the Public Documents Room, Washington, D.C., and can be seen without cost, (2) the Environmental Report and the Preliminary Safety Analysis Report (PSAR) are placed in the Public Docu­ments Room, Washington, D.C., and can be seen without cost, and (3) major environmental agencies and private foun<,1.ations are giving funds to public groups to enable these groups to enter into litigation. The utilities generally believe that government agencies are the representatives of the public. Therefore, if the local interests are dissatisfied with the site chosen for an electric power plant, their recourse logically is to the state and federal agencies that certify the plant. If the public is not pleased with the decisions agencies render, they should register their dissatisfactions with congressional oversight committees. The utility industry makes available informa­tion about the proposed power plants, but feels no need to accommodate all local opinions. SUMMARY The public interest is not a monolith. It is composed of a variety of interests which may not be represented when power-plant siting decisions are made. A presentation of these views may be seen as a potential aid to the decision-making process because it: (I) provides agencies with another dimension useful in assuring responsive and responsible decisions, (2) serves as a safety valve allowing interested persons and groups to express their views before policies are announced and implemented, (3) eases enforce­ment of administrative programs relying upon public cooperation, and (4) satisfies judicial demands that agencies observe the highest procedural standards (Boyton, 1972). . . . Nonetheless we have observed that public partic1pat1on can have adv:rse consequences. It presents us with the problem of identifying the "public" and establishing ~ho should be allowed to represent its interests. Too little participation results in a loss of checks on and inputs ~to the administrative process, while too much creates duplica­tion in presentation before administrative bodies and a consequent loss of time and money-both so valuable in this period when the demand for energy is greater than the supply. We do not offer a resolution to the controversy, but we do pose the problem conditionally: (I) If the realiz.ation of an adequate energy supply is to be weighed more heavily than environmental concerns and the representational benefits of public participation, then the present efforts of utilities to meet their customers' demands should be regarded with less contempt. The administrative process might be restructured to exclude duplication of testimony and to facilitate the timely issuance of construction and operation permits. (2) On the other hand, if public input is viewed as an integral part of power system planning then: a) Both state and federal agencies should respond promptly to citizen inquiries. b) Each agency should maintain a register of persons who have communicated an interest in agency matters. c) An agency should inform all registered persons of upcoming proceedings in the areas of their interest. d) Any interested person or party should have the right to intervene in agency proceedings. e) Intervening parties should be loaned or provided with copies of documents, hearings, and testimony free of charge. t) Where circumstances warrant, intervening parties might be provided with legal assistance or counsel by the administrative agency. g) Written submissions by interested parties should be accepted for filing regardless of defects in form, substance, or omission. If such defect cannot be remedied or supplied by the agency, the interested party should be notified by mail of the defect and given reasonable time in which to remedy the defect (Kaufman, 1972). Public Particfpation REFERENCES 1. Administrative Procedure Act, 5 USC § 701 (Supp IV) (1946). 2. Administrative Procedure Act, 5 USCA § 706 (1946). 3. Association ofData Processing Service Organizations, Inc., etaL v. Camp, Comptroller ofCurrency et al., 397 U.S. 150 (1970). 4. Boyton, John K., ''The Acceptance of Public Partici­pation," Administrative Law Review, vol. 24, winter, 1972. 5. Citizens Committee for Hudson Valley v. Volpe, 425 F. 2nd 97 (1970). 6. "Citizen Participation and Its Impact Upon Prompt and Responsible Administration," Southwest Law Journal, vol. 24, 1970. 7. Environmental Defense Fund v. Harden, 428 F. 2nd (1970). 8. Federal Power Act,§ 313 (b), {1920). 9. 1954 Housing Act, 42 USC § 145 (l)(a)(1965). 10. Kaufman, Irving R., "Power For The People-And By The People," Administrative Law Review, vol. 24, winter, 1972. 11. National Academy of Engineering, Engineering for Resolution of the Energy-Environment Dilemma, National Academy of Engineering, Washington, D.C., 1972. 12. Office of Communication ofUnited Church ofChrist v. FCC, 359 F. 2nd 994 (1966). 13. Road Review League, Town ofBedford v. Boyd, 270 F. Supp 650 (1967). 14. Scenic Hudson Preservation Conference v. FPC, 354 F. 2nd 608 (1965). 15. Sierra Club v. Morton (Mineral King Case), 40 U.S. LawWeek4397 (1972). 16. Sie"a Club v. Hickel, 2 ERC 1386-1387 (1970). 17. Stone, Christopher D., "Should Trees Have Standing­Toward Legal Rights For Natural Objects," Southern California Law Review, vol. 24, winter, 1972. 18. The Association of the Bar of the City of New York, Electricity And The Environment, West Publishing Co., St. Paul, 1972. 19. Williams, Jerre S., "An Evaluation of Public Partici­pation in the Location of Public Facilities", Public Affairs Comment, vol. 19, no. 1, LBJ School of Public Affairs, University of Texas at Austin, November, 1972.