US power utilities: electric shocks Until blackouts or zoning battles trigger outrage, the cables, pylons and substations that transmit electricity around the US, and form the backbone of its economy, remain largely ignored behind fences and placards warning of electrocution. But recently, solid results from groups such as SPX, Hubbell and Quanta Services, which make and install power products have attracted attention. So have a handful of deals. This month General Electric signed a joint venture with a Chinese transformer company, while Eaton agreed to buy Cooper Industries. Analysts are touting the potential of the transmission and distribution niche. The International Energy Agency predicts that global T&D investment will top $7tn by 2035, with $1tn spent in the US alone, split broadly between replacement (65 per cent) and new build (the rest). Utilities have little choice but to increase their spending. After decades of under-investment in the US, key infrastructure is ageing just as regulatory scrutiny picks up, while new renewable energy sources and gas power plants are being added around the world and need to be tied into the grid. Think carefully before flicking the switch, though. For starters, the excitement seems a little overdone given that a modest uptick in T&D spending has been under way since 2005, when the US passed some key energy legislation. And despite all the hand-wringing, the US grid is actually still in reasonable shape, according to a recent MIT report. There are more reasons for caution. Investment in renewables already appears to be sputtering, meaning fewer new transmission miles may be required. Production overcapacity in the transformer niche remains a problem. For now, new anti-dumping duties are holding Korean manufacturers at bay in the US, but Chinese peers are waiting in the wings. Beware of electric shocks.