As the grid becomes increasingly unstable due to age and extreme weather, utilities are ramping up spending on long-overdue maintenance and capital improvements

  • Utilities are increasing spending on maintenance and capital improvements to improve the reliability of the grid
  • Customers are paying more for less-reliable electricity
  • Outages are becoming more frequent and longer due to age and extreme weather
  • Utilities are planning their largest capital investments since World War II
  • Rate hikes are expected for customers of many utility companies
  • The grid needs significant upgrades and replacements
  • Electricity prices are rising due to increased spending and higher costs
  • Tree-trimming and maintenance activities are being ramped up to reduce outages
  • Climate change is exacerbating the reliability issues
  • Utilities are investing in automation and digitization to modernize the grid

Americans used to spend little energy worrying about whether the lights would come on at the flick of a switch, or how much that electricity cost. For a growing number of people, those days are over. Larry Hilkene, who moved from Indiana to a quiet Detroit suburb just over a year ago, has since had nine power outages, the longest one lasting 16 hours. In the same period, his utility company, DTE Energy, raised electricity rates and sought regulatory approval for another increase as it works to improve the reliability of its system. Utility customers across the country are increasingly paying more for less-reliable service—a trend driven home by a massive heat wave that has triggered outages around the country in recent weeks. Utilities from Michigan to New York and beyond are planning their largest capital investments since World War II as the grid becomes more unstable as a result of age and extreme weather. Customers of roughly 17 large utility companies may see rate hikes above the rate of inflation between 2022 and 2027, according to Sector & Sovereign Research. Utilities say significant spending is needed in part to address serious reliability issues. Between 2013 and 2022, the nation’s utility companies recorded a roughly 20% increase in outage frequency, according to the most recent federal data. Outage duration increased by more than 46% over the same period, largely as a result of weather-related disasters. Many utilities are also ramping up spending on routine activities such as maintenance and tree-trimming to reduce outages. The need for work is spread throughout the country, with parts of the mid-Atlantic, the Midwest, and California expected to see some of the steepest rate increases in the coming years. Nationwide, large sections of the grid are decades old and need replacing, and labor and equipment have each become more expensive as a result of inflation and supply-chain snarls. Climate change is exacerbating the reliability issues, with more frequent and intense storms causing disruptions. Utilities are investing in automation and digitization to modernize the grid and improve reliability.·

Factuality Level: 3
Factuality Justification: The article provides detailed information about the challenges faced by utility companies in the US, particularly focusing on power outages, infrastructure upgrades, and rate increases. However, it lacks diverse perspectives and may have a bias towards highlighting the negative aspects of the situation without exploring potential solutions or positive developments in the industry.·
Noise Level: 3
Noise Justification: The article provides a detailed analysis of the challenges faced by utility companies in the U.S. due to aging infrastructure, extreme weather events, and increasing demand. It discusses the impact on customers, the need for significant investments, and the consequences of climate change. The article is focused and supported by data and examples, but it contains some repetitive information and could benefit from more diverse perspectives.·
Public Companies: DTE Energy (DTE), CenterPoint Energy (not available), Avangrid (not available), New York State Electric & Gas (NYSEG) (not available), Portland General Electric (PGE) (not available)
Key People: Larry Hilkene (not available), Pedro Azagra (CEO of Avangrid), Hugh Wynne (Sector & Sovereign’s co-head of utilities research), Shahriar Pourreza (Guggenheim analyst), Maria Pope (CEO of Portland General Electric (PGE)), Jerry Norcia (CEO of DTE Energy), Katherine Blunt (not available)

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Financial Relevance: Yes
Financial Markets Impacted: The article discusses the increasing electricity rates and the need for major capital investments by utility companies to modernize the grid. This can impact the financial markets as it may lead to higher costs for consumers and potentially affect the profitability and stock prices of utility companies.
Financial Rating Justification: The article specifically mentions the raising of electricity rates by utility companies and the need for significant investments in the grid, which can have financial implications for both consumers and companies in the sector.·
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no mention of any extreme event in the article.·

Reported publicly: www.wsj.com