Electric utilities nationwide are facing substantially higher construction costs as they continue to address the country's pent-up need for new investment in generation, transmission, distribution, and environmental compliance, according to a report by The Brattle Group released by the Edison Foundation. The report, "Rising Utility Construction Costs: Sources and Impacts," found that construction cost increases, whose sources are external to the utility industry, will affect industry investment planning and present new challenges for regulators. Rising costs have been due primarily to high global demand for commodities and manufactured goods, higher production and transportation costs (in part owing to high fuel prices), and a weakening U.S. dollar. Price increases in the past several years have affected all utility sector investments, the report found, from coal and wind power projects to transmission and distribution projects.
To view the full report, go to http://www.edisonfoundation.net/reports.htm.