Dive Brief:
- Investor-owned utilities (IOU) and transmission companies set a record in 2012 by spending $34.9 billion on transmission and distribution infrastructure, according to the Edison Electric Institute.
- The sector spent $14.8 billion on transmission, a 24% increase over 2011, partly on the need to connect new generating facilities to the grid, the trade group for IOUs said. Spending on distribution projects increased 4.7% to $19.2 billion.
- EEI expects transmission spending to increase again this year and then dip somewhat in future years, reflecting the cyclic nature of major infrastructure spending.
Dive Insight:
“It is important that the industry continues to be able to earn a return on equity that is commensurate with the level or risk associated with these significant investments,” EEI President Tom Kuhn said.
The EEI data shows that utilities are in a spending cycle. They're building power plants and beginning to replace aging infrastructure. Expect electric rates to rise, which will benefit distributed generation. Wait, did someone say utility death spiral?