New data from the Federal Energy Regulatory Commission (FERC) show only 98.6 miles of transmission projects were completed between January and April, which at an annual rate is far short of the 1,985 miles completed for the whole of 2011.
For April alone, there were zero completions in any voltage category, compared with 71 miles in April 2011, the FERC data show.
The pattern was also seen in March when completions were less than a tenth of the year-ago number. In the first three months of 2012, only 86 miles of transmission were completed.
And capital investment is lagging behind year-ago levels, according to SNL Financial. The company’s data show the amount of capital raised in the power sector for the year to May 18 this year dropped to $20.19 billion from $23.19 billion a year earlier.
The Cost of Delay
The new numbers come amid gathering industry estimates that the cost of work ranging from repairing aging power infrastructure to building new transmission for renewable energy sources to complying with tougher environmental rules will run into the trillions of dollars.
The latest warning came from the American Society of Civil Engineers (ASCE) which said the U.S. is spending $11 billion a year less than it should on electric infrastructure improvements. Unless spending increases, the country will face a $107 billion electricity investment “gap” by 2020, ASCE said.
Still, that deficit could be closed by projects currently planned, according to Energy Central’s TransmissionHub, which provides data and research for industry planners.
It projected $169.7 billion worth of transmission projects will come on line between 2012 and 2020, accelerating from $7 billion spent on 3,100 miles of transmission projects this year to $31 billion on some 9,700 miles of line in 2015.
“The soaring demand for electricity and the need for increased reliability are driving a range of new projects for the North American electric transmission systems,” said Rosy Lum, chief analyst for TransmissionHub.
But plans don’t necessarily become power lines on schedule because of local opposition and regulatory bottlenecks, analysts said.
Power line planners are routinely delayed or blocked by communities that don’t want the lines running through their towns because of aesthetic or environmental concerns, Otto J. Lynch, vice president of Power Line Systems, which develops and sells software for transmission lines, said.
“It is one thing to plan a transmission line and another thing to build it,” said Lynch, who called the ASCE’s latest cost estimate for electric infrastructure work “extremely conservative.”
Among recent examples, Idaho Power officials this month delayed a decision on siting a new line and rebuilding two existing lines in the Wood River Valley until federal wildlife officials determine whether the sage grouse, a local bird, is classified as endangered, a decision that may not be reached until 2015.
“I’ve seen a transmission project be halted for six months because there was an eagle’s nest three miles away and the construction activity would disrupt their mating or because they found some striped garden snake,” Lynch said.
Delays built into the transmission planning process are a disincentive for investors who are ready to provide the huge sums needed for the new infrastructure but are discouraged by the delays, said Jim Hoecker, counsel for WIRES, a nonprofit advocacy group for the transmission industry.
While investors would like to get the 10-12% return that they could expect on such regulated assets as transmission lines, they don’t want their money tied up for 10 or 12 years while the planning and permitting process takes place, Hoecker said.
“That has a really chilling effect,” he said.