New survey results from Edison Electric Institute (EEI) show that shareholder-owned electric utilities and stand-alone transmission companies invested a record $30.3 billion in the nation's transmission and distribution infrastructure in 2011.
The latest EEI Annual Property & Plant Capital Investment Survey
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 (nominal $) that the industry invested in 2010.
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) onto the grid.
The EEI survey also found that the industry invested 13.0-percent more on electric distribution infrastructure in 2011 than the $16.9 billion (nominal $) it invested in 2010, for a total of $19.1 billion (nominal $).
The increased capital expenditures helped utilities to 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 ($13-$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 (2011 $) as compared to 2010 investment levels.
- The level of industry transmission investment in 2011 is 96.0-percent higher than investment made in 2000 (after adjusting for cost increases) and over this same time period, the industry has 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 (2011 $) as compared to 2010 distribution investment levels.
- Since the beginning of 2000, the industry has invested $237 billion (2011 $) in the nation’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.
The EEI Annual Property & Plant Capital Investment Survey measures historical capital expenditures on electric transmission and distribution infrastructure by shareholder-owned utilities, but does not include expenditures for operations, maintenance or the acquisition of existing utility systems or segments.
The EEI Transmission Capital Budget and Forecast Survey was developed at the direction of the EEI CEO Transmission Working Group. The primary objective of the survey is to collect planned budgeted investments in electric transmission infrastructure over a five-year horizon in a manner that complements information collected on the EEI Property & Plant Capital Investment Survey. Please note that planned transmission investment was adjusted for inflation using the GDP Deflator.