Rising Utility Construction Costs: Sources and Impacts
Environmental Assessment of Plug-In Hybrid Electric Vehicles
Why Are Electricity Prices Increasing? An Industry-Wide Perspective
Rising Utility Construction Costs: Sources and Impacts
The Brattle Group
September 2007
Electric utilities nationwide are facing substantially higher construction costs as they continue to make and plan for needed new investments in generation, transmission, distribution, and environmental compliance. Following nearly a decade of stable and even declining real costs for materials (steel, other metals, and cement), prices over the past two to three years have risen dramatically, exceeding 100 percent in many cases. Prices for manufactured components, specialized labor, and construction project management also have risen by 25 percent to more than 100 percent in the past several years.
This report documents recent increases in the construction costs of utility infrastructure, identifies the underlying causes of these increases, and explains how these increased costs will translate into higher rates that consumers might face as a result of required infrastructure investment. The report also provides a reference for utilities, regulators, and the public to understand the issues related to recent construction cost increases.
Environmental Assessment of Plug-In Hybrid Electric Vehicles
A collaborative study by: The Electric Power Research Institute (EPRI) and the Natural Resources Defense Council (NRDC)
July 2007
Plug-in hybrid electric vehicles (PHEVs) are the next-generation hybrid vehicles that will help our country enter a new era of clean transportation, transportation efficiency, and greater energy independence. While still in the development phase, PHEVs promise to deliver important benefits over traditional hybrid vehicles.
Because questions remain regarding the environmental consequences of displacing oil with electricity as a primary vehicle fuel, the Electric Power Research Institute (EPRI) and the Natural Resources Defense Council (NRDC) conducted a comprehensive study to address two key questions related to environmental impacts:
- How will increased electricity demand from the transportation sector over time shape future electricity supply and its impact on the environment?
- How will changes in the electricity grid—including replacement of older power plants and incorporation of new technologies such as advanced coal, renewables, and other low-emitting sources—affect the environmental picture over time?
Among the study’s key findings were:
- Widespread adoption of PHEVs can reduce greenhouse gas (GHG) emissions from vehicles by more than 450 million metric tons annually in 2050—equivalent to removing 82.5 million passenger cars from the road.
- There is an abundant supply of electricity for transportation; a 60-percent U.S. market share for PHEVs would use 7 percent to 8 percent of grid-supplied electricity in 2050.
- PHEVs can improve nationwide air quality and reduce petroleum consumption by 3 million to 4 million barrels per day in 2050.
Learn more.
Why Are Electricity Prices Increasing? An Industry-Wide
Perspective
Prepared by: The Brattle Group
June 2006
For more than a century, the electric power industry has
supplied the United States with abundant and reliable
electricity. The industry that brought “smokeless light”
to American cities in the late 1800s now supplies the
power for more than 176 million personal computers and a
national network of 208 million cellular phones,
contributing to both industrial productivity and
consumer comforts that enhance our standard of living.
The power industry now faces an unprecedented challenge.
At a time of record high fuel prices, historic
environmental challenges, and industry structural
change, the nation’s demand for reliable electric power
continues to grow. While much of the nation’s power
infrastructure is aging, the industry must keep up with
the need for more capacity, increased reliability and
power quality, and lower environmental impacts. Thus,
the industry must invest in a new generation of power
plants, environmental controls, transmission lines, and
distribution system expansions and upgrades.
While these new investments will maintain reliability,
diversify our fuel mix, and increase environmental
performance, they come with added costs.
Electricity price increases are occurring across the
United States, among all types of electricity providers,
to one degree or another.
This report examines the factors underlying the recent
increases in electricity costs. It focuses primarily on cost changes
experienced over the past five years and the projected
trends over the next decade.
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