What does COVID-19 mean for utilities and transmission lines?
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- Apr 2, 2020 11:44 am GMT
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It’s impossible to know exactly how COVID-19 will affect the United State’s economy at this point. The world’s economic system is a complex one of which nobody has a truly comprehensive understanding. Further complicating matters is the fact the widespread quarantines we’re seeing have never been done at such a scale in modern times. The general consensus is that we’re in for a bad recession, but there are sure to be many unforeseen and possibly novel consequences as well.
More specifically though, what does the current situation entail for utilities? Wisconsin regulators actually started an investigation last week to find out. The research endeavor was ordered by the state governor Tony Evers’ in response to the Public Service Commission’s move to allow utilities to waive late fees, suspend disconnection orders etc. The researchers assigned to this project will attempt to determine how much money utilities will use because of the mentioned emergency measures and what, if anything, will need to be done to cushion the blow.
Given the new prevalence of waiving late fees and suspending power shutdowns, I suspect other state governments will undertake similar investigations in the coming weeks. The findings should be expected to differ between regions and utilities, but it seems clear that the entire industry will take a hit.
I wonder how this financial squeeze will affect the many transmission upgrade projects we’ve heard about the past couple years. Utilities across the country have been gearing up for major infrastructure projects meant to facilitate the accelerating adoption of renewable energy generation. The logic is laid out in CapX2050 Transmission Vision, a recent study put together by 10 major upper-mid west utilities, including Xcel and Great River Energy. The study indicates that the region needs lots of new transmission lines, among other things.
The combination of demand and simplicity in engineering terms might mean we don’t see much of a drop off in transmission line investment. But it’s anybody’s guess at this point.