Concern levels rising for electric industry leaders


Dean Oskvig,
President, Black &
Veatch’s global energy
Overland Park, KS, U.S.A. — (METERING.COM) — May 9, 2013 – Reliability and regulation, both environmental and economic, top the list of concerns for utilities in North America in 2013, according to Black & Veatch’s latest annual industry survey.

Others in the top 10 include aging infrastructure, cyber security and technology, with most of these issues also being ranked with higher levels of concern than in previous years.

“This year’s report reflects the views and outlooks of an industry in transition,” said Dean Oskvig, president of Black & Veatch’s global energy business. “From the lack of clarity in energy policy to disruptive effects of unconventional gas supply, major shifts are occurring just as the industry embarks on a new round of unprecedented capital spending addressing concerns over aging infrastructure, reliability and resilience.”

Among key findings in the report, which is based on input from more than 600 industry participants – more than 60 percent in utilities:

  • The main focus of investments is in the core operations of generation, transmission and distribution to update aging infrastructure, improve asset performance and utilization, and preserve reliability.
  • Average customer rates continue to increase, with nearly two-thirds saying their average rates had increased, including 10% with rates largely increased.
  • Most utilities are planning to start or expand smart grid programs in 2013. However, the industry continues to struggle with justifying program costs to regulators, but competing capital investment programs also represent a major challenge.
  • Business process redesign is the primary management challenge for integrating the smart grid into the utility enterprise, while modifying legacy systems to maintain operability with new solutions is the main technology challenge.
  • More than two-thirds of utility participants believe telecommunications networks will be important or very important to future operations, with the private, public infrastructure hybrid model set to be the dominant arrangement for the foreseeable future.
  • Distributed generation is growing in popularity. Low gas prices and rising conventionally generated electricity costs are improving the business case for industrial and manufacturing companies to produce electricity themselves on their premises.