PCCA Journal 1st Quarter 2010

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PCCA Journal|1st Quarter 2010 8
over the last three to five years. Regulatory Research
Associates reports approximately 71 gas or electric rate
cases in 2007 versus 65 cases in for 2008 and an addi-
tional 65 or more cases in 2009, representing a marked
increase in activity from the previous ten years.
Transmission & Distribution
John Maynard Keynes saw the government as a spend-
er of last resort dur-
ing economic crises
and was confident
it could be effective
in taking a long-
term view to orga-
nize and encourage
investment. Presi-
dent Obama may
have torn a page
from the Keynes-
ian dogma. Of all
power segments,
transmission and
distribution (T&D)
construction is the
most positively
impacted by federal
government over-
sight, regulation,
and funding.
T&D construction is the focus of much attention
as a result of President Obama’s promise to upgrade
our ailing grid and create a “green” superhighway for
power. But is a high-voltage transmission system built
to accommodate renewable energy wishful thinking?
FMI forecasts a healthy 6 percent growth in T&D-relat-
ed construction in 2010 (Exhibit 3). The overall growth
rate for this segment will not begin aggressive accelera-
tion until the housing inventory is absorbed, which
FMI does not anticipate until 2011.
Electric Transmission & Distribution
There are four dominant drivers of electric transmis-
sion and distribution construction in FMI spending
forecasts:
Homebuilding/electricity demand 1.
Smart grid 2.
Aging infrastructure/reliability efforts 3.
Renewable power generation 4.
FMI forecasts a slow resumption of growth for
homebuilding and energy demand through at least 2011
and aging infrastructure issues are well understood. In
the descriptions below, we focus on understanding the
impact smart grid and renewable power will have on
the T&D sector.
Market Forecast
Continued from page 7
Continued on page 10
“I expect to see the state,which is in a position to calculate the
marginal efficiency of capital goods on long views and on the basis of
the general social advantage,taking an ever greater responsibility for
directly organizing investment....”
– John Maynard Keynes,The General Theory of Employment Interest
and Money,1935.