IPPs should have to share the cost burdens
by For the MBJ
Published: May 9,2010
Your April 29 article, “Four states discuss Entergy’s power purchasing practices,” brought up a good point about how electricity is supplied.
Charles Long with Entergy stated that the problem between utility companies and independent power producers (IPPs) is that although IPPs pay a fee to transport electricity on the utility’s transmission system, they do not have to pay to maintain or update the system.
Ratepayers foot the bill to build and maintain a grid that will send electricity across the utility’s service area. Electric infrastructure is extremely expensive. High-voltage transmission lines for example, such as those needed to send electricity from a plant to an area of demand, can cost upwards of $1 million per mile. Utilities must also build and maintain the distribution networks that bring the electricity to homes and businesses. IPPs want to use this infrastructure to sell power, sometimes to customers in other states where higher electricity rates equal higher profits.
IPPs play an important role in meeting the state’s electricity needs. But if the IPPs want to use the grid to transfer their electricity, it only makes sense that they should pay to play and share in the cost of building new electric infrastructure and in maintaining the system. Ratepayers should not be required to bear all of the costs while reaping none of the rewards.
Program Coordinator, Advance Mississippi
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