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US Market Construction Update
Public Utility Construction

Public utilities include railroads, electric power, gas/petroleum pipelines, and telecommunications. The strong growth trend of 2000 will continue through 2001. We expect utilities building and nonbuilding construction to increase approximately $50 billion in 2001 and to increase another 7% in 2002. The power, telecommunications, and water/sewer industries are all driving growth. Electrical power providers are trying to keep up with demand as economic growth and recent years' temperature extremes have pushed them to expand their capacities. Many other changes are also occurring within the power industry.

To ensure that all power providers have fair, nondiscriminatory, and open access to transmission lines, the Federal Energy Regulatory Commission (FERC) issued a series of orders. The orders required transmission-owning utilities to open their transmission systems to all suppliers. The orders also encouraged utilties to turn over operational control of their transmission facilities to regional transmission organizations (RTO's) by the end of 2001

There has been significant progress in forming RTOs. Today, one-third of all electricity customers are already being served by existing RTOs and an additional 22% will be covered by RTOs that are waiting for approval. In the near future, more than 79% of the total number of electricity customers will be served by proposed RTOs and those under active development. The U.S. Supreme Court said it will hear two challenges to a 1996 FERC order designed to ensure open access to teh interstate energy transmission grid and to spur competition in the national electricity market. The Supreme Court will hear oral arguments in the two cases and then will issue its ruling during its term that begins in October 2001.

Reprinted with permission from 2001-2002 U.S. Construction Markets Update, FMI Corporation, 919.787.8400. For more information, visit or call Angela Blackburn at 919.785.9220.


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