I live in the area though I have never gone out to see the "light". All of the school kids talk about it and go out to see it and I have heard some pretty good yarns.
My question is how long have the power lines been there? The fact that the light seems to be best seen by looking straight along the power lines seems significant to me as this is the way I would expect ionized gas to behave, similar to the aurora borealis, swamp gas or a fluorescent light. And that is exactly what this sounds like: fluorescing ionized gas. That would also explain why it is not visible overhead to those who go down by the creek, etc. you would have to look down the length of it along the power lines to really appreciate the effect.
There might also be some sort of local piezo-electric effect or gas release locally that accentuates this also. Perhaps there is simply fluctuation with the amount of current flowing through the lines. And as wavelength of light is related to energy that would also make some sense as it would explain the color changes seen.
Hate to dash everyone's fantasies with common sense but that seems most likely to me and it is more fun than headlights, which in fact I doubt it is from my own daughter's descriptions. She had better not have been using drugs! ;D
Your thoughts have been the same as many, but the light has been their much longer than the power lines. I know this because I had a step-grand father by the name of Jack Queue who worked on the railroad that is parallel to the power lines.