Power Line Extension
Electricity from renewable technologies such as photovoltaics (PV) or wind can offer an economic option for customers in rural areas instead of paying the cost of extending power lines to the property. Line extensions may be expensive — as much as $60,000 per mile in mountainous terrain.
Power line extension policies require that, in cases where a utility requires a customer to pay a contribution toward the construction of extending utility power lines to a remote location, the utility must provide information about on-site renewable energy technology options. State policies vary as to the point at which utilities must provide information to customers regarding alternatives to line extension. In Arizona, a utility is required to perform a cost:benefit analysis to compare line extension with stand-alone PV. The state's largest utility, Arizona Public Service, also offers a financing package for installation.
Colorado also requires a cost:benefit analysis by the utility, but only when the ratio of monthly kilowatt-hour consumption to the distance in miles of the needed line extension is less than or equal to 1,000. For example, if a customer's home uses 800 kWh per month and requires 1.0 mile of line extension, giving a ratio of 800, the utility must provide information to the customer regarding the installation of a local renewable energy system.
In New Mexico, utilities must, at the customer's request, provide information on as many as three suppliers of renewable energy when the cost of a line extension is greater than $25,000. In Texas, a utility must provide information about on-site renewable energy systems to any customer who needs a line extension. In many cases, the utility will offer a brochure supplied by Renewables for Utilities Texas Cooperative.
Arguments for Power Line Extension Policies
Installing renewable energy systems provides a more energy-efficient option for consumers in rural areas with a relatively low electricity demand.
Renewable energy options may be less expensive for rural customers, but without line extension policies, most customers would not know about this option.
Arguments Against Power Line Extension Policies
These policies offer consumers information but little incentive to install renewable energy systems. Thus, unless consumers have a particular interest in solar power, they could be inclined to stick with traditional line extension methods.
Requiring utilities to provide this information results in additional burdens on the utilities and slows the process for expanding the grid and providing service.
For more information on power line extension policies, visit the Database of State Incentives for Renewable Energy (DSIRE).