for several years. While excess power can be sold to neighboring utilities, utility commissions try to ensure that only needed capacity is actually constructed. In recent years, the participation of consumers and environmental groups in the commission hearings concerned with electric power rate changes and the siting of new facilities has become more common. This trend has lengthened the time required for a utility to win approval of any proposed action. The effect has been to make the utilities even more conservative in the methods they are willing to use in providing power of the accepted quality. If a new method of meeting the demand can result in increased costs, it is unlikely to be implemented unless these costs can be recovered as they are incurred. The addition of an SPS to a power pool will probably cause an increase in the utilities' costs. When the SPS comes on-line, plants which were base-loaded would be pushed up into intermediate load service; it has already been shown that the duration of this situation can be substantial. The effective of purchasing the SPS would be a sudden jump in the total utility equity, with the proceeds from energy sales insufficient to cover this jump for many years. This situation would lead to an increase in the utilities costs. A corresponding reduction in the fuel cost which could almost totally offset the increased fixed costs might be expected. Calculation of Utility Cost Increases The correct method of calculating the aforementioned cost increases and decreases would compare the total utility costs when only conventional equipment is used, with the corresponding costs if an SPS were added to the generation mix. Such a calculation, using the production costing computer programs used by utilities, is too time consuming for this study. The costing programs are run twice, once for the power pool assumed to contain an SPS and once with no SPS. The fixed costs and the production costs (the fuel and operating costs) required to meet the load, given the two assumptions would automatically be provided in the computer output. The cost of providing spinning reserve and extra reserve
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