The language of short-lived sales and low-cost financing is more usually heard around used-car lots and department stores, but there isn’t any reason the same factors can’t apply to the utility business.
The short-term, act-now opportunity open to the power sector in the US is clear in an environment that will dictate significant capital investment, the authors of a new report from consulting firm Booz & Company argue.
“An unprecedented convergence of low costs of capital and pent-up infrastructure demand eastng rate pressures have created ideal conditions for building the electric and gas utilities of the future,” Booz representatives said in releasing the report. “But these conditions won’t last forever.”
A combination of the new focus on power supply reliability and interconnectedness following the extensive blackouts that accompanied Hurricane Sandy in October alongside the reelection of President Obama have created a pivotal moment for utilities to act to take advantage of the potent mix of cheap money and low-priced natural gas, the report says. Pressure is once again building on utilities to cut emissions following Obama’s victory, as a recent Breaking Energy piece noted.
The staggering sums of money utilities expect to spend in the coming decade are also noted by the report authors, who warn that “executives should avoid getting too accustomed to the current economic environment.”
To download a PDF copy of the report via a link to the Booz website, click here.