U.S. Power Industry to See $11 Billion in Transmission-Related Projects Kick Off in 2013

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Researched by Industrial Info Resources (Sugar Land, Texas)--Transmission lines are among the most intricate energy projects and take a long time to get to the construction phase. Lengthy permitting procedures, endless environmental issues, not-in-my-backyard reactions from landowners--the list goes on. In spite of these difficulties, U.S. transmission-related spending is certain to increase in 2013. Industrial Info is estimating that 47 projects worth about $11 billion will kick-off construction this year.

In October 2012, Superstorm Sandy put the power grid to the test. More than 2 million people in New York alone lost power after the storm. The utility, Consolidated Edison Incorporated (NYSE:ED) (New York, New York), struggled to get power back on for consumers. People in Connecticut and New Jersey remained without power for weeks. Hundreds of miles of transmission lines and substations will need to be rebuilt. The lack of a working electrical grid almost brought the local transportation system to a stop.

Transmission spending is anticipated to increase in 2013 to address significant grid reliability issues. More than half of the aging infrastructure is beyond its useful life and will start breaking down. Most older parts are major components, like transformers and circuit breakers, which can cost millions. Almost every existing transmission line or substation will require some kind of modifications if there are any upgrades to increase the voltage.

The spending increase also will be driven by the build-out to connect renewable resources, like wind and solar, in regions that have a high demand for power. Texas, the No. 1 state for wind production, is a case in point. The Competitive Renewable Energy Zones transmission line project, which was authorized in 2005, is now estimated to cost almost $7 billion upon completion in 2013 and 2014. It will include hundreds of miles of new high-voltage lines carrying wind power from West Texas to large cities across the state.

Public Service Electric and Gas Company (NYSE:PEG) (PSEG) plans to spend $3.5 billion on its transmission system beyond 2014. PSEG has shifted some of its spending from capital projects in its power plants to transmission. PSEG has faced a great deal of opposition to the controversial Susquehanna-Roseland Transmission Line, which stretches from Pennsylvania to New Jersey.

The Obama Administration's Fast Track Project also would accelerate the permitting and construction of seven proposed high-voltage transmission lines in Arizona, Idaho, Colorado, Nevada, New Mexico, Wyoming, Utah and Pennsylvania. The Susquehanna-Roseland line is one of them.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.