Line Contractor

Utility Spending on Transmission Lines Continues to Increase

Published On
May 27, 2021

Utility spending on transmission work, in terms of new transmission lines and existing transmission line system operations and maintenance (O&M), is continuing to grow.

March 2021 report report from the U.S. Energy Information Administration (EIA) notes that the amount of spending by major electric utilities on the U.S. electric transmission system increased from $9.1 billion (in 2019 dollars) in 2000 to $40 billion in 2019. 

New transmission infrastructure included poles, towers, overhead lines, underground lines and station equipment. 

“These investments replaced aging infrastructure, enhanced grid reliability and resilience during extreme weather events, reduced congestion, and connected to renewable resources,” noted the report. 

In 2019, utilities spent $23.5 billion of the total $40 billion on new transmission investment.

Utilities spent the remaining $16.5 billion in 2019 on transmission system O&M, which included work on power lines, load dispatch and station equipment.

“Power plants are often located far from customers, requiring large networks of transmission power lines to deliver electricity,” according to the report. “In 2019, most utility spending on transmission system O&M was on payments to transmit electricity in power lines owned by other utilities or independent transmission owners.” 

The report also noted that, while spending increased more than four-fold over the last 20 years, it did level off between 2018 and 2019, increasing only 3% from 2018 to 2019. During that time frame, there was a 1% increase in new transmission investment and a 7% increase in transmission system O&M.

In March 2020, the Federal Energy Regulatory Commission (FERC) proposed the idea of revising its electric transmission incentive policy in such a way as to stimulate the development of transmission infrastructure. FERC explained that this investment in infrastructure was important to support the nation’s evolving renewable-generation resource mix, technological innovation and shifts in load pattern.

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