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- Title
Economic Inefficiency of Small Municipal Electric Generating Systems.
- Authors
Wallace, Richard L.; Junk, Paul E.
- Abstract
Economies of scale in the generation of power are significant and it is contended that a more economical source of power is available for many small municipal systems. Further, it is demonstrated that federal tax laws have provided an important incentive for municipalities to continue to generate their own power in inefficient plants. About 2,000 of the 3,600 electric systems in the United States are municipally owned, yet, in total, these systems serve only 10 percent of the nation's retail power customers and generate less than 5 percent of the nation's electric power supply. Of these municipal systems, about half purchase their power needs from larger utilities. This article, however, is concerned with the 900 or more systems that generate all or part of their own power requirements and continue to invest in small generating units to provide the additional capacity made necessary by retirements and load growth. As a group, municipal systems generated almost 26 billion kwh in 1955 and by 1965, this figure had increased to almost 50 billion kwh. In both years, the municipals accounted for 4.7 percent of U.S. net generation.
- Subjects
MISSOURI; UNITED States; ECONOMIES of scale; MUNICIPAL services; ELECTRIC power systems; MUNICIPAL government; ELECTRIC power; TAX expenditures; OVERHEAD costs; POWER resources; ELECTRIC generators
- Publication
Land Economics, 1970, Vol 46, Issue 1, p98
- ISSN
0023-7639
- Publication type
Article
- DOI
10.2307/3145431