Electric power execs lean toward nuclear

Feb. 19, 2010 at 12:32 PM
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OVERLAND PARK, Kan., Feb. 19 (UPI) -- A survey of U.S. electric power industry leaders reflects the impact of the weak economy and indicates their support for nuclear energy.

In its fourth annual Strategic Directions in the Electric Utility Industry Survey, engineering and consulting giant Black & Veatch found that nuclear energy is the utility industry's preferred "environmentally friendly" technology, followed by wind power and natural gas.

"Contrary to many 'experts' who talk about the utility industry today, most insiders still view nuclear energy as the best way to achieve environmental improvement while meeting the capacity and energy needs of the future," the authors of the report, released Thursday, wrote.

Still, more than 75 percent of the 329 executives who participated in the survey said respondents said there is a future for coal-fired power plants.

Industrial and commercial sales for many utilities have been "severely or seriously eroded" by the recession, the study shows. Less than one-quarter of those surveyed said they expect electricity usage in their area to rise by more than 1.5 percent annually in the next 10 years.

"The times are tough, so the industry is returning to its Job One: maintaining reliable service and preserving financial health, William Kemp, who leads Black & Veatch's management consulting services around strategy and sustainability, said in a release. "Reliability and regulation popped back to the top of the major issues of concern for industry managers."

The survey shows that electric utility spending on programs for energy efficiency and demand-side management is rising, to almost 2 percent of revenue. Black & Veatch, which has headquarters in Overland Park, Kan., said survey results indicate that the industry is spending an amount equivalent to approximately 15 to 20 percent of pre-tax earnings to get customers to use less of its product.

As for renewable energy, 79 percent of those surveyed said wind power projects are under way or planned within the next five years, while 73 percent of respondents reported solar projects under way or planned in the same time period.

A majority of those surveyed said they expect some form of carbon legislation to be in place by 2012 but more than 70 percent oppose the cap-and-trade system contained in current legislative proposals. Some 52 percent said the United States cannot afford carbon legislation.

"Utilities are facing increasing demands to spend more money on basic infrastructure, energy efficiency, the Smart Grid and cybersecurity," Kemp said. "Their expected leading role in curbing carbon emissions would hit utility costs very hard.

"Yet their sales are declining or relatively flat, and regulatory commissions are reluctant to approve rate increases when the economy is down. Electric utilities will be hard-pressed to satisfy both customers and investors over the next few years."

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