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PCCA Journal|1


Quarter 2010


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


Homebuilding/electricity demand


Smart grid


Aging infrastructure/reliability efforts


Renewable power generation


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.