Contributor/author(s): John Musacha
Land values ultimately determine the tax income for any given city. I have found that high-polluting power plants such as coal depress property value sufficiently enough (on the small 128 x 128 grid at least) to make buying power from a neighbor actually cheaper than producing your own. The property values in your city, and thus tax revenues, will rise dramatically when your sims are not subjected to all that coal pollution.
This method actually has been tested out on a small-grid (128 x 128) city in the mid-20th century. First I powered my own city of 425,000 sims with seven coal plants. My tax rate was a uniform 7% and the city was running a budget surplus of approximately §225,000 a year. Then I accepted an offer to buy power from a neighbor at 10 simoleans a month (which is about the average), and destroyed all seven coal power plants in my city. Even with paying my neighbor approximately §6,900 a year for the power, the sharp decrease in pollution resulting from the removal of the power plants raised property values enough so that at the tax rate of 7%, and with the population still at 425,000, the city began to run surpluses of approximately §245,000 a year. Therefore, through buying power rather than supplying my own, I managed to increase my city's annual surplus by §20,000, in addition to freeing up 112 (16 x 7) extra tiles for zoning and further property development.
This method works best in smaller grid cities in the twentieth century that rely on heavily polluting power plants, which by the constraints of the grid size, necessarily are placed near populated areas, thereby lowering property values. If you are able to place your polluting power plants far away from the city (like on a large grid) or can use non-polluting power sources (available later in the game), you probably wouldn't be able to MAKE money through buying power from a neighbor like you can in the scenario tested above.



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