Electric Power Distribution Industry Trends

Consolidation

The largest investor-owned utilities (IOUs) have gained significant market share over the past 15 years, mainly due to consolidation. The 10 largest IOUs own more than 50 percent of total IOU generation capacity. The application of "best practices" encourages consolidation, as does the need for large financial resources to fund more efficient generating capacity.

Re-Regulation

The deregulation catastrophe in California has caused other states to rethink their plans. The California electricity crisis of 2000 and subsequent revelations about market manipulation by large energy trading companies prompted calls for re-regulation of the industry.

Low Investment in Transmission Lines

Utility investments in high-voltage power lines have been falling since the late 1970s, and the industry plans to add only 6,000 miles of lines, a 3 percent increase, during the next few years. Capital costs are up to $2 million per mile on above-ground lines and more than twice that for underground.