National Energy Policy Needed, Electric Utilities Say

The United States’ lack of national energy policy stops utilities from investing in new technology, a new study found.

The findings are based on an annual survey of the electric utilities by Black & Veatch, a global engineering, consulting and construction company. The study highlights the electric utility trends in the United States. In 2011, more than 700 people from the utility industry – mostly executives and managers – participated in the survey. Questions focused on operations, regulations and emerging technologies’ impact on the industry. 

Aging Infrastructure Top Concern

While the future of the United States’ power industry continues to be evasive, the study’s top 10 insights point toward the increasing significance of advanced technology, global competitiveness and a national energy policy. For the first time, aging infrastructure is now the top operational concern among all survey respondents. Due to the large amount of capital required to replace the aging infrastructure, utilities will need a long-term policy on which to base their long-term technology investment decisions.

The call for a national energy policy is based on the overall responses to the question, “What factors most motivate the industry to invest in new technology?” The top two answers were “regulatory requirements” and “government incentives.”

High Consumer Energy Prices … Smart Grid to the Rescue?

Along with aging infrastructure concerns come predictions for higher energy prices. More than 70% of all respondents agree that energy and commodity prices will rise significantly in the next five years, a change that according to Black & Veatch will cause consumers to see a drastic increase in their electric bills. 

A smart grid has the potential to help run the electric grid more efficiently and increase power system reliability, which would save consumers and utilities money by saving energy. However, survey respondents believe that a lack of understanding and funding represent the greatest obstacles for smart grid implementation. Not only do customers appear to have a lack of interest and knowledge in a smart grid, but respondents also believe that the smart grid concept is neither well defined within their states nor across the industry.

• Photo Caption:The chart includes the responses of all survey participants and is not included in the full electric utility survey results.

Nexus of Water and Energy

In this year’s survey, water supply also ranked as a top environmental concern. Water effluent also made the top of the list demonstrating the growing link between water and energy and adding increasing importance for water efficiency programs such as the Alliance’s Watergy program. 

‘No Policy’ Actually is Policy

While the 2011 survey affirmed trends identified previously, new and important issues emerged that will continue to shape the direction of the United States’ electric utility industry.  As Rodger Smith, president of Black and Veatch’s management consulting business, concludes, “the the lack of a comprehensive and coherent energy policy has encouraged the industry to remain fragmented and stagnant … having no policy actually is policy … and as leaders, we must collaborate to move the industry forward.”