Economic Evaluation of Power Transmission System Project Alternatives

Two electric utility projects are considered for investment. The purpose is to solve a long-term shortfall in the power supply for a small metropolitan area of the western Maryland. Both the problem and the specific network configuration are contrived for the purpose of exercising Engineering Economics analysis methods, though they are loosely based on the actual power grid and could represent a realistic scenario. The study compares benefits and costs of building a 40-mile, high-voltage transmission line to building a 600 MW coal power plant. Both projects are found to be profitable; however, the Transmission Line is preferred for its higher annual worth