Editor's Log: Market Trends For 2010

January 2010 Vol. 65 No. 1

Having a national smart grid continues to be a priority for many, including Congress. However, for a smart grid to be possible, the basic power grid infrastructure requires lots of upgrading. How fast this initiative can be funded remains to be seen, but there is so much national attention on the concept that I tend to think it will be sooner than later.

Going underground continues to gain traction with progressive thinking utilities – and regulatory agencies as well. All of which will slowly help the electric market, though probably not enough to significantly increase construction in 2010.

Sewer, water and storm sewers are also impacted by the state of the economy, though to a lesser degree. With a struggling tax base and falling property values, cities are reluctant to take on debt to rebuild infrastructure – even when they acknowledge it is desperately needed. The tired adage still rings true: out of sight, out of mind. In tight money times, city leaders still tend to ignore sewer and water systems in favor of more visible public works. The good news is that residents are not quite as ignorant of the situation as they once were, and the EPA and state agencies are under mandates to get even more aggressive with enforcement.

Sewer and water rehabilitation is a bright spot. Stimulus money is just now really beginning to hit home and the first half of 2010 will probably see a flurry of rehab activity. Since most rehabilitation work is funded by user fees, rehab has ridden out the tough economic times better than most market niches. Also, in increasing numbers, cities are realizing that their user fees tend to be inadequate and often kept artificially low. Rate increases are becoming frequent.

While 2010 will not be a banner year, it will be a better year. It will be a transition year to a solid 2011.