Investment in new electricity transmission in the U.S. reached $14.1 billion in 2012 — five times the amount spent on new transmission in 1997, according to the Energy Information Administration (EIA).
EIA cited a number of factors in the increase, which reversed a three-decade decline. In 2005, Congress passed a law that mandated the implementation of incentive-based rate treatments for interstate transmission, which improved reliability. Wind and solar generation grew between 1999 and 2012 spurred in part by state renewable energy standards and renewable energy tax credits. Population shifts also played a role in increased investment. While overall U.S. electricity retail sales grew less than 1% annually from 1997 to 2012, growing demand from consumers relocating to the South and West necessitated new investment in those areas.
EIA also attributed the growth to increases in the costs of materials needed to build new transmission and reforms in electricity markets that led to upgrades and expansions.
EIA’s investment data reflect activity from investors and privately owned utilities.
