Shareholder owned utilities are set to invest more than $1 billion each month in transmission projects in the US in 2013, with a planned total of $15.1 billion this year up from already-impressive $11 billion in total in 2011.
Transmission infrastructure shortfalls have been widely forecast for the entire US power sector, which last saw comprehensive buildouts decades ago. Since then, successive attempts to reform power markets have often been blamed for failing to create sufficient incentives for companies to invest in new needed power line upgrades.
The Edison Electric Institute, which released the numbers for 2013 investment forecasts as part of its seventh annual Transmission Projects: At A Glance report, said the money represents a commitment by its members to reliability. The widespread and long-lasting blackouts that followed Hurricane Sandy in the Northeastern US in October 2012 underlined the need for more resilient infrastructure, and further spending is planned in the region.
Continued investment in transmission infrastructure will be required to, among other things, maintain reliability and support shifts in the nation’s generation portfolio,” EEI Vice President of Energy Delivery James Fama said in a statement alongside the numbers. “However, developing transmission presents risks and challenges unlike investment in any other utility plant.”
He stressed the role of federal regulators in creating market conditions that could support investments like the more than 150 transmission projects completed in 2012 by EEI members.
Fama: “We encourage the Federal Energy Regulatory Commission to continue providing investment returns that are commensurate with the prevailing risks. These are necessary to continue to attract sufficient capital to achieve the needed transmission investment levels and promote the adoption of advanced technologies. This is particularly true given the growing competition for capital to invest in our nation’s strategic assets and infrastructure.”
The full report can be accessed here. Investment numbers are in 2011 dollars.
