Quanta Services: US should expect extended power outages from storms

Quanta Services Inc, the world’s largest builder of transmission lines has warned that the US will face longer power outages from storms in 2010, as power utilities have cut Transmission and distribution maintenance spending by as much as 50 per cent.

“Because they haven’t been doing maintenance for a few years, we will see longer outages and we will see more frequent outages as storm season approaches,” Chief Executive Officer John R. Colson said in an interview with the Bloomberg news agency. “It’s a frequent, very frequent occurrence that cities are affected by storms that shouldn’t really affect their distribution systems, and they are devastated and they are out of electricity for days and days.”

For example, FPL Group Inc has reportedly called a halt to various grid improvements aimed at boosting reliability after it received a lower than requested rate increase on January 13. The company had previously been fined a record US$25m for a power outage in Florida.
According to Mr Colson, the main reason for the drop in maintenance spending is that utilities are uncertain if they can recover the costs from rate increases. A key factor is that a number of US state governors are up for reelection this year and therefore may well be opposed to rate increases for fear of reducing their appeal to voters (Bloomberg)