Poor Economy, Regulatory Uncertainty Are Drag on U.S. Electric Utilities

With industrial and commercial sales of electricity still in a slump, U.S. utilities are focusing on ensuring reliability while preserving their financial stability, reported Black & Veatch in its fourth quarter “Strategic Directions in the Electric Utility Industry Survey.”

Three-hundred and twenty-nine industry participants were polled for the report.

Respondents indicated that growth expectations had been adjusted downward, with capital spending declining accordingly. Generating plants were most frequently noted as the asset group in greatest need of replacement. Spending on efficiency and demand-side management, however, has increased significantly.

Seventy-nine percent of respondents reported having wind projects planned or underway in the next three to five years; for solar projects, the number was 73 percent. However, nuclear energy was the technology most frequently named as best suited to help meet both environmental requirements and increasing demand.

Because many workers who had been nearing retirement have elected to defer retiring as a result of impacts to their retirement funds, the aging workforce issue has been deferred somewhat, reported respondents. However, as markets recover over the next two to three years, some anticipate that this will once again become a problem.

As with previous surveys, carbon emissions ranked highest as an environmental concern, followed by water supplies. But three-quarters of respondents said they believed coal generation would have a future “when fiscal realities are fully considered.”

Return to March 2010 Western Energy News

To sponsor Western Energy News, please contact WEI at 503 231-1994.