I’m writing this editorial the day after President Barack Obama delivered his State of the Union address in which he challenged Americans to call on their creative spirit. He also outlined his plan to “win the future.” He proposed five areas in which he wants to focus: innovation, education, infrastructure, deficit reduction and more efficient federal bureaucracy.
I am in no way a political analyst or expert. I do, however, want to comment on the president’s intent to focus on the nation’s infrastructure, which has been neglected too long.
In late 2009, the American Society of Civil Engineers (ASCE) graded the nation’s infrastructure and gave it a failing grade—a D. This grade included the overall infrastructure (roads, water system, railways, wireless telecommunication, electricity delivery, etc.). It is sad that we’ve fallen from a nation whose infrastructure was the envy of the world to one whose infrastructure lags many countries, including South Korea and China in some areas.
The ASCE gave various areas of the overall infrastructure, including energy infrastructure—generation, transmission and distribution—a separate grade. The good news is energy received a higher grade than the overall infrastructure, but the bad news is that grade was a D+.
According to the ASCE, electricity demand has increased about 25 percent since 1990. Transmission facility construction has decreased 30 percent. The organization points out that annual investment in new transmission facilities generally has declined or has been stagnant during the past 30 years, but an increase has occurred in investment during the past five years. The organization also said that funding isn’t always the primary reason new transmission doesn’t get built; it is instead because of “overly stringent permitting requirements, lawsuits and other regulatory issues.”
The ASCE also addressed distribution facilities. It said that during the next 10 years, electric utilities likely will spend more on distribution infrastructure than they will on generating capacity: some $14 billion per year on average.
Congress is focused on cutting spending and decreasing the deficit, and it didn’t take long for many lawmakers to criticize the president because he didn’t discuss how the country will pay for his plan to win the future. That’s not surprising. Budgeting and funding projects are complex and difficult issues for our lawmakers. It would be difficult to find anyone who doesn’t think the country must reduce its deficit and get its financial house in order.
Significant electricity infrastructure improvement will not be cheap. Despite Obama’s emphasis, utilities probably shouldn’t count on much government funding.
Winning the future and upgrading infrastructure will require more from the government than funding. Congress should realize that easier permitting, sensible regulation and an improved corporate tax structure could create an environment that allows utilities to invest more easily in their T&D infrastructure.
In his State of the Union address, Obama also said, “No workers are more productive than ours. No country has more successful companies or grants more patents to investors and entrepreneurs. We are home to the world’s best colleges and universities.”
I agree. It would be great if he could also say that no country has a more supportive and helpful government. The president, his administration and lawmakers on both sides of the aisle need to create a friendly regulatory and business environment that will make it easier for electric utilities to invest in their infrastructure.
Editor in chief TERESA HANSEN
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