Smart Grid

January 02, 2013

U.S. Firms Set Record in 2011, with $30.3 Billion Outlay for Electric Infrastructure

Shareholder-owned electric utilities and stand-alone transmission companies invested a record $30.3 billion in U.S. transmission and distribution infrastructure in 2011, based on the results of a recently released survey.

The increase was due in large part to replacing and upgrading existing transmission lines, developing new lines to meet electricity load growth in certain parts of the country, and interconnecting new sources of generation (including renewable resources) with the grid.

The latest “EEI Annual Property & Plant Capital Investment Survey,” conducted on behalf of the Washington, DC-based Edison Electric Institute (EEI)—the trade group of U.S. shareholder-owned electric companies, representing about 70 percent of the American power industry—revealed that the industry’s capital expenditures on transmission totaled $11.1 billion in 2011—an 8.4-percent increase over the $10.2 billion that the industry invested in 2010.

The EEI survey also found that the industry invested 13.0-percent more on electric distribution infrastructure in 2011 than the $16.9 billion it invested in 2010, for a total of $19.1 billion. The increased capital expenditures helped utilities ramp up the development of automated meter infrastructure (AMI) and other ‘smart grid’ activities related to the distribution system.  In addition, many companies increased distribution investment in 2011 to repair or replace lines damaged by severe weather events.“Looking beyond 2011,” said EEI president Tom Kuhn, “the industry is projected to spend more than $94 billion on capital expenditures in 2012–—[comprising] $13 to $14 billion on transmission; $20 billion for distribution. During the last 10 years, the industry’s investment in transmission and distribution infrastructure has doubled.”Additional highlights from the EEI survey include:

After adjusting for a 4.7-percent increase in transmission-related construction costs in 2011 from data obtained from the “Handy-Whitman Index of Public Utility Construction Costs,” actual transmission expenditures increased 3.7 percent (in 2011 dollars), as compared to 2010 investment levels.

The level of industry transmission investment in 2011 was 96 percent higher than investment made in 2000 (after adjusting for cost increases) and, over this same time period, the industry made a cumulative investment of $97.4 billion in transmission.

Adjusting for a 4.9 percent increase in distribution-related construction costs in 2011, distribution investment increased 7.9 percent (in 2011 dollars), as compared to 2010 distribution investment levels.

Since the beginning of 2000, the industry has invested $237 billion (again, in 2011 dollars) in the U.S. distribution system.

Please note that capital expenditures on infrastructure projects, particularly distribution-related expenditures, have fluctuated greatly over the years because the distribution sector is closely tied to economic and population growth.

In addition, line repair and restoration costs from severe weather-related events can have a significant impact on capital expenditures depending on the frequency and severity of storms in any given year.

Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO Miami 2013, Jan 29- Feb. 1 in Miami, Florida.  Stay in touch with everything happening at ITEXPO (News - Alert). Follow us on Twitter.

Edited by Brooke Neuman