Sluggish Sales Could Deprive Utilities of Revenues to Maintain Vast Network of Generating Plants and High-Voltage Lines
The long-term future of the nation’s electric grid is under threat from an unlikely source—energy-conserving Americans.
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That is the fear of some utility experts who say that as Americans use less power, electric companies won’t have the revenue needed to maintain sprawling networks of high-voltage lines and generating plants.
And if the companies raise rates too high to make up for declining sales volumes, customers will embrace even more energy-saving gizmos and solar panels, pushing down demand for grid power. The Edison Electric Institute, the trade group for investor-owned utilities, has warned that they could face a “death spiral.”
“Utilities seem to have concrete shoes on,” says Elisabeth Graffy, co-director of Arizona State University’s Energy Policy, Law and Governance Center.
Since 2004, average residential electricity prices have jumped 39%, to 12.5 cents a kilowatt-hour and prices for all users have jumped 36% to 10.42 cents, according to the U.S. Energy Information Administration. Retail sales to homes and businesses still are less than they were in 2007, before the recession.
Even in parts of the country where the population has been growing, electricity sales have been anemic. Southern Co. , for example, said that in the third quarter of 2014, residential accounts grew 0.7% in its four-state region—but total home electricity sales contracted 0.6%.Read the rest of the story HERE and view a related video below:
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