Salient to Investors:

Analysts say a new breed of conservationists is curtailing sales of electricity and driving an unprecedented shift in the U.S. power industry – power use per unit of economic growth fell to a record in 2011.

Demand for electricity is shrinking even as economies grow, eroding sales and profit at U.S. utilities.

Theodore Hesser at Bloomberg New Energy Finance said:

  • Utilities are expected to invest $12.4 billion in smart meters and updated electricity grids through 2015.
  • A small change in the growth of power demand can completely change a utility business model.
  • Utilities are shifting to providing higher-profit services like installing programmable thermostats and retrofitting buildings with windows, insulation and roofing that use less energy, which will further sink demand.

Wood Mackenzie predict US demand for power will grow 1.1 percent annually through 2030 versus 1.7 percent from 1990 through 2011.

Angie Storozynski at Macquarie Capital USA predicts long-term load growth will be 0.6 percent, says slow load growth should hurt near-term earnings and may drive utilities to seek rate increases more frequently from regulators or postpone spending on power plants and transmission lines.

Read the full article at