EIA: Annual utility spending on electric distribution system reached $57.4B in 2019
According to a new report from the U.S. Energy Information Administration (EIA), yearly spending on electricity distribution systems by the major utilities has increased 64 percent since 2000, with figures reaching as high as $57.4 billion in 2019.
The lion’s share of this has gone toward capital investment. In 2019, such efforts accounted for $31.4 billion for replacing, modernizing, and expanding existing infrastructure. Another $14.6 billion was shelled out for operations and maintenance costs, while $11.5 billion was spent on things like advertising, billing, and customer service.
In 2019, most of the $31.4 billion capital investment was spent on the power lines that allow distribution to happen. Both underground and overhead lines benefited from this spending, although underground accounted for more of the cost than overhead that year. Such lines tend to be added or expanded during the production of new neighborhoods, or higher electricity flows during increased sales periods.
Operations and maintenance of the overhead lines also was the bulk of O&M costs, representing $7.3 billion of those spent in 2019. Such efforts included vegetation management and tree trimming; animal protection; line testing for strength, temperature, voltage, and frequency; and repairs needed due to storms or faults.
“Distribution spending has outpaced growth in both the number of electric customers and in retail electricity sales because much of the increased distribution spending in the last 20 years has been on projects that are not directly related to customer growth or increased sales,” the EIA said in a statement.
Such projects include the replacement of aging equipment, modernization and upgraded maintenance, billing technology, and efforts to strengthen distribution structures against future weather damage.
