Latest from Business Management

Photo 270943795 / Wichayada Suwann
sales_process_photo_78780392__tashatuvango_dreamst
sales_process_photo_78780392__tashatuvango_dreamst
sales_process_photo_78780392__tashatuvango_dreamst
sales_process_photo_78780392__tashatuvango_dreamst
sales_process_photo_78780392__tashatuvango_dreamst

The Sales Process

Feb. 27, 2024
Artinun Prekmoung / DreamsTime
Ellie Grid Story
Ellie Grid Story
Ellie Grid Story
Ellie Grid Story
Ellie Grid Story

Gearing Up for Grid Opportunities

Sept. 30, 2021
Federal investments toward hardening the electric grid will provide many business opportunities for electrical distributors, reps and manufacturers in the utility market.

Over the past several months, Electrical Wholesaling’s editors have broken down key portions of Biden’s infrastructure plan that are sure to have the most impact on the electrical industry. In May we covered what’s next for electric vehicles (EVs) and EV charging infrastructure, and in July we reported on the opportunities and challenges with broadband expansion. This issue, we’ll be covering the potential impact of the infrastructure plan’s proposed funding for an improved electric grid.

According to the latest White House Fact Sheet, a Department of Energy (DOE) study found that power outages cost the U.S. economy up to $70 billion annually. The plan aims to allot approximately $65 billion toward initiatives including building thousands of miles of new, resilient transmission lines to facilitate the expansion of renewable energy; promoting smart grid technologies; investing in R&D for advanced transmission and electricity distribution technologies; and more.

According to a World Resources Institute (WRI) report, “A 21st-century electricity grid needs to be resilient enough to handle extreme and frequent weather events; integrate a growing share of utility-scale clean energy resources like solar and wind; support distributed energy resources, including electric vehicles, distributed solar and energy storage; and meet evolving customer needs that prioritize control over energy consumption and cost.” WRI believes the $65 billion investment will help get the U.S. grid at least part of the way toward those goals.

We spoke to some veterans in the electrical field to see what sorts of opportunities and challenges this grid investment will create for manufacturers, distributors and reps.

FROM GOOD TO GREAT

From good to great. Overall, opportunities will far outweigh any challenges when it comes to grid investments in a utility market that is already strong and stable. PJ Martini, president of Martini & Associates, Inc., Annapolis, MD, an independent utility manufacturers’ rep, says that work related to the grid is consistent, as utilities will always require upgrades to help reduce power outages and keep people’s lights on. “It’s a constant flow,” Martini says. “That’s the way our business is. It’s constant upgrading because there’s always something getting old, because it’s physics. No cables last forever.”

However, the infrastructure plan is likely to spur even more spending toward certain areas: In particular, hardening the grid against weather and natural disasters, but perhaps more importantly, against cyberthreats. And that’s where additional business for electrical distributors, reps and manufacturers can be captured when it comes to the infrastructure plan.

Rusty Batch, CEO of Marietta, GA-based Tri-State Utility Products Inc. (No. #79 on Electrical Wholesaling’s 2021 Top 150 electrical distributors), says that in the past, emphasis has always been focused around hardening the grid against weather disasters. This came up in the White House Fact Sheet, which cited the Texas power outages as a prime example of why the U.S. needs a grid modernization.

Batch believes cybersecurity will likely take over as the number one concern when it comes to federal spending. “While there is still room for improvement there, the new, emerging threat is likely cyber disaster,” he says, pointing out the impact of the Colonial Pipeline attack this past May. “The government’s investment [in cybersecurity] is possibly the most important and the most underappreciated by the public.”

Martini says that hardening the grids against cyberattacks means utilities will require building redundant systems. “Redundancy basically means [utilities] are going to buy back-up equipment, sometimes twice as much stuff,” he says, which will provide many business opportunities for both distributors and reps in the utility market. Manufacturers that produce products necessary for grid expansion and modernization (e.g., wire, cable, systems and controls) will also see plenty of opportunity.

Martini also mentions an increased need for personal protective equipment for linemen to protect them against shock, especially as OSHA requirements continue to change and become more stringent.

Other factors to consider. One major consideration that distributors and reps will need to keep in mind is the infrastructure bill’s timeline. “What we know from recent federal legislation (COVID relief, SMART grid, 2008 stimulus, etc.) is that the actual flow of cash takes so much longer than anyone would estimate,” Batch says. “Our expectation should be that any activity resulting from this legislation should not be expected before 2023.” For this reason, Batch adds that forward planning will make all the difference, especially with increased material lead times and high raw material costs.

Martini echoes that timeline and adds that utilities in general must go through a lengthy approval process for projects. For example, utilities are currently planning for 2022, which once approved, means that by the end of this year they’ll begin buying and producing products for next year. That means federal spending on infrastructure that works directly with utilities may see some lag time.

Additionally, Batch says a potential challenge could arise if the government implements reporting or compliance requirements. While that is yet to be seen because the bipartisan infrastructure plan still needs to be fully approved by Congress, it’s something distributors and reps may need to be aware of.

Another consideration is what type of energy transmission is employed. Biden’s plan seems to lean toward renewables like wind and solar, which will dictate which products that distributors and reps will need to provide their customers. But regardless of the type(s) of energy distribution decided upon, there will still be plenty of opportunity for electrical reps and distributors to capture a piece of the market share. “No matter what kind of generation, you still have to have the infrastructure to move the power to your home,” Martini says, whether that generation is in the form of solar, wind, nuclear, or even fossil fuels. “That’s where we come in.”

In conclusion. With certain change and a few impending unknowns, Martini says the biggest asset for any player in this field will be the ability to adapt. “The utility has to adapt, the distributor has to adapt, and the rep like me has to adapt,” he says.

While there are still many details yet to be worked out in the infrastructure plan, one thing for certain is that there will be no shortage of opportunity for those in our industry, and the unknown shouldn’t be something to worry about.

“If you adapt and you balance what you have to offer from the supplier standpoint,” Martini adds, “you can get through it and participate in the business.”

Related

© Ying Feng Johansson | Dreamstime.com
More than 30 million Americans live in areas where there is no broadband infrastructure to meet work, education, health care and other needs. Many rural and low-income urban communities face the most challenges.
More than 30 million Americans live in areas where there is no broadband infrastructure to meet work, education, health care and other needs. Many rural and low-income urban communities face the most challenges.
More than 30 million Americans live in areas where there is no broadband infrastructure to meet work, education, health care and other needs. Many rural and low-income urban communities face the most challenges.
More than 30 million Americans live in areas where there is no broadband infrastructure to meet work, education, health care and other needs. Many rural and low-income urban communities face the most challenges.
More than 30 million Americans live in areas where there is no broadband infrastructure to meet work, education, health care and other needs. Many rural and low-income urban communities face the most challenges.

Betting on Broadband

July 26, 2021
nrqemi/iStock/Getty Images Plus
Nrqemi I Stock Getty Images Plus
Nrqemi I Stock Getty Images Plus
Nrqemi I Stock Getty Images Plus
Nrqemi I Stock Getty Images Plus
Nrqemi I Stock Getty Images Plus

What's Next for EV?

May 26, 2021