A coordinated approach helps control costs.
Jonathan Lesser is president of New England Economics Group.
Historically, transmission and distribution assets have been quiet utility stepchildren — generally ignored by both regulators and senior utility management while, their generating asset relations remained in the limelight. But as restructuring of the electric industry evolved in the 1990s, a looming competitive environment created strong pressures within utilities to reduce spending.
Many utility distribution engineers will tell you that under-investment has been occurring since that time. Rate freezes, the removal of regulatory protections for generating assets, and management of transmission and distribution (T D) assets by holding companies with significant unregulated operations also have contributed to pressures to reduce spending on T D assets and infrastructure.