Are Electrical Utilities in a Death Spiral?

by Emil Morhardt

In the prior century, electricity sales in the US characteristically increased by 10% each year. No longer; since 2000, annual increases have been constrained to about 1.5%, and since the depression of 2007, have been decreasing rather than increasing at all. I am tempted to say “Good for us!” Saving energy seems like an entirely good thing, except that to modernize our aging grid, not to mention transitioning to a smarter grid, the utilities are going to require money. Since sales are down, this probably means increased electricity prices, and if customers are offended and install solar panels and wind turbines to compensate, prices could increase further. You get the idea.

Steven Nadel and Garrett Herndon of the American Council for an Energy-Efficient Economy have just released a comprehensive report discussing this dilemma. They used Continue reading