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[SERIES] Monopolized Utilities – Is The End in Sight?

Home » [SERIES] Monopolized Utilities – Is The End in Sight?

[SERIES] Monopolized Utilities – Is The End in Sight?

In my first post on my new blog series, I started exploring the history, challenges, and opportunities of the aging electrical grid in the United States.  In this follow up post, we’ll look at how the developing world is acting on some of their competitive advantages and we’ll discuss the challenge of our infrastructure debt.  In addition, I’ll highlight some of unique opportunities these challenges present!

WHAT WE LEARNED FROM THE DEVELOPING WORLD 

One of the most fascinating aspects of developing economies is their unique position in the time line of the technological era.  Take Brazil and India for example.  In the mid 1990’s, both nations were transitioning into the global economy but without the resources of a first world industrialized nation.  As a result, they were forced to make some tough decisions on infrastructure investments.

They could either, copy what was already working in the U.S. and Europe, or they could come up with a different approach.  In the case of Brazil, a choice was made to focus on Ethanol over fossil fuels by harnessing their own sugarcane resources and effectively growing their way through their modern transportation challenges.  

With India’s population eclipsing the 1 billion mark in August of 1999, many economists wondered how the country would handle the needs of an exploding middle class.  In one of the more ingenious government decisions at the end of the 20th century, India’s central planners opted to invest in Cell towers instead of land based phone lines.  As a result, their population was able to play a game of technological leap frog which put them on the fast track to incredible economic growth that we’re still seeing today! 

THE CHALLENGES OF OUR INFRASTRUCTURE DEBT

When you compare the approach of those developing nations with the United States, it’s easy to see why they have some competitive advantages.  Over the past century we have poured trillions of dollars into building and maintaining our infrastructure and, at this point, we’re staring down the barrel at some tough realities.

In the software development world, there’s something called Technical Debt, which is basically the result of employing lots of quick fixes in the code base versus using a more thought out and comprehensive approach.  Just like financial debt, it can weigh down a product in such a way that growth is affected.  If you step back and take a look at infrastructure in the United States, it’s pretty clear that we’ve accumulated a vast amount of Infrastructure Debt.

The result?  Now we’re stuck in a quandary where it’s going to cost us more to completely transition to the newer and more cost effective systems than it is to repair and maintain our existing infrastructure.  Unfortunately, that approach means the gap in competitive advantage will continue to expand out of our favor.

THE END OF UTILITY MONOPOLIES?

Thankfully, there’s a compromise oriented solution to this problem.  While a wholesale shift to new infrastructure is cost prohibitive at this point in our economic development – introducing new infrastructure technologies in a surgical fashion has proven to be a wise investment.

One unforeseen beneficiary of hybrid electrical infrastructure appears to be the U.S. energy consumer.  In the past, an energy monopoly actually made a lot of sense.  When you get down the brass tax, the energy industry has never been about creating energy, it has been about transporting it.  Now that a growing number of private citizens are generating their own power and sending excess energy back into the grid – we may be looking at the end of the Utility Monopoly once and for all.

 

WHAT’S NEXT?

Only time will tell how these trends will pan out but I’m hopeful that we’ll see some significant positive changes made to our electrical grid over the next decade.  In my next post, we’ll delve into what that future may look like for Electrical Contractors.  Whether it’s a chance tor additional high level skills training, or improved pay and job security – make no mistake, the trades stand to benefit greatly from this once in a generation opportunity!

I know that most of my audience is uniquely effected by this subject I would love to hear your thoughts on the topic too!

-Tyson

By | 2018-06-14T18:21:31+00:00 May 16th, 2016|Blog|0 Comments