November 17, 2014

Investment in Electricity Distribution System Increases

According to the U.S. Energy Information Administration (EIA), U.S. investor-owned utilities increased their annual investments in their electric distribution systems from about $13 billion in 1994 to a peak of $20 billion in 2012.  In general, the electric distribution system consists of the street level power lines, substations, and transformers (as opposed to the electric transmission system, which brings power from power plants to substations on high voltage lines).

EIA reports that much of the increased spending was related to making the distribution system more resistant to weather-related outages by (1) burying power lines, (2) updating equipment, (3) installing smart grid technologies like automated circuit breakers and feeder switches, and (4) increasing standby equipment.  From 1998 through 2008, spending on underground lines equaled spending on overhead lines because underground facilities were installed in almost all new residential and commercial developments and many critical overhead lines were moved underground.