Electric Power Transmission in the US Industry Market Research Report Now Available from IBISWorld

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Though the industry grew throughout the recession, its pace of expansion will speed up during the economic recovery. As companies across all industries ramp up their production, demand for electricity will rise. Operators will also continue to benefit from federal stimulus funding for the development of a national smart grid and for the improvement of the electricity grid. Furthermore, after several highly publicized blackouts in the early part of the decade, legislation will encourage utilities companies to invest in new infrastructure. For these reasons, industry research firm IBISWorld has updated its report on the Electric Power Transmission industry.

IBISWorld Market Research

IBISWorld Market Research

Economic growth will lift electric power consumption and boost industry revenue

The Electric Power Transmission industry stagnated over the past five years as electricity consumption declined during the recession. The federal government and state public utility commissions (PUC) responded with generous subsidies and incentives, partly mitigating the revenue lost from lowered consumption. “However,” says IBISWorld industry analyst David Yang, “federal government stimulus only offered short-term aid and most has expired since 2009.” The US Energy Information Administration (EIA) estimates that electricity consumption has declined on average 0.1% per year since 2007. Industry revenue has contracted in line with power consumption. In the five years to 2012, IBISWorld estimates that revenue has declined at an annualized rate of 0.1% to $369.2 billion.

Electricity consumption slowed during the recession as nearly all downstream customers cut back expenditures. According to Federal Reserve estimates, manufacturers increasingly idled production facilities over the past five years, resulting in lower industrial electricity consumption. According to Yang, “Furthermore, the EIA estimates that households have increasingly adopted energy-efficient appliances, causing overall household consumption to slightly decrease.” And in the commercial sector, many operations closed, dragging down demand for power. In addition, electricity price growth has also slowed as transmission infrastructure became increasingly saturated over the past five years. Market saturation often occurs because PUCs generally grant higher rate increases to utilities that invest in transmission infrastructure. The EIA expects both electricity consumption and electricity prices to fall in 2012. Consequently, IBISWorld estimates that industry revenue will decline 2.4% over the year.

Most players in the Electric Power Transmission industry operate in regional and local markets, resulting in a low level of market share concentration. In 2012, IBISWorld estimates that the four largest utilities will account for less than 15% of industry revenue. Over the past five years, while public utility commissions (PUC) have regularly granted rate increases, the overall growth of electricity prices have slowed, reducing profitability. Consequently, utilities exited the industry or consolidated. In the five years to 2012, the number of enterprises is expected to fall on average 0.6% per year. In early 2012, Exelon Corporation and Constellation Energy Group, two industry giants, merged to bring three major regional utilities under the same roof. This industry is already dominated by large regional firms. For instance, two utilities, Pacific Gas and Electric and Southern California Edison, control nearly the entire California market.

As the economy recovers, businesses and factories will resume operations, which will boost electricity consumption. Additionally, PUCs are expected to grant rate increases for renewable energy transmission investments. According to EIA projections, over the next five years, electricity consumption will increase on average 0.6% per year while electricity prices will increase on average 1.8% per year. As a result, in the five years to 2017, IBISWorld forecasts that revenue will continue to grow.

For more information, visit IBISWorld’s Electric Power Transmission in the US industry report page.

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IBISWorld industry Report Key Topics

Firms in this industry transmit and distribute electricity from power generators to distribution centers, other electric utilities and final consumers. The transmission system includes lines and transformer stations, while the distribution system consists of lines, poles, meters and wiring that deliver the electricity to final consumers. This industry does not generate electricity.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

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