Suppose that you were asked to complete steps 3-5 of a CBA (identify the impacts

ID: 335516 • Letter: S

Question

Suppose that you were asked to complete steps 3-5 of a CBA (identify the impacts and select measurement indicators, predict the impacts quantitatively over the life of the project, monetize all impacts) for a project that involves placing a high-voltage power transmission line near residential property that will provide more reliable power, but also may have some negative externalities associated with its operation. Discuss how you would identify the impacts on residents near the power line and how you would select measurement indicators (units) for this CBA. (5 points) a. What method(s) would you use to quantitatively predict the impacts of the new transmission line? Why? (5 points) b. . How would you monetize the impacts that you have identified above? (5 points)

Explanation / Answer

a. Impact of power line can be identified on residents by doing the sensitivity analysis and identifying the impact categories.These can be:

Negative Impact Categories

1. kV i.e level of voltage according to which emf impact will vary.

2. Decibel measurement according to which emf impact will vary.

3. Area covered by the tranmission line passing through the residential area.

Positive Impact Categories

4. All time availability of power/Increased reliability.

5.Reduction in power costs due to less transmission distance.

4. Hours (measuring time of avaibility now and earlier)

5. Dollars (since costs are measured)

1. Costs would be identified on the basis of above mentioned negative impact categories.

2. Benefits would be identified on the basis of above mentioned negative impact categories.

3. Net Present Value (NPV) of these costs and benefits is to be identified.

4. NPV of project iis to be calculated by subtracting benefits from costs.

5. If the NPV is positive (NPV > 0), economic assessment is positive and project can be carried out.

c. Imapacts can be monetized in following form:

1. Health impact due to EMF & Noise - can be taken in the Health & Safety costs.

2. All time availability of power/Increased reliability can be sought from customers as Convenience Charges.

Measurement indicators (unit)