Electric Utilities Making Major Cuts in R&D Spending

Abstract

Fu nding for electricity-related research and developmen t by elec-
tric ut ilities decreased about 33% from 1993 through 1996, and fur ther
r edu ction s were expected in 1997. So says a recent report by the US
General Accounting Office (GAO).
The Committee on Science of the Hou se of Repre s ent ativ es had
as ked the GAO to look at the follow ing qu estions:
• Wha t chan ges hav e occur red in the amount of electricit y-related
R&D funding?
• What were the primar y reasons for those change s?
• Wha t has been the impact of the changes on the type s of R&D being
fu nde d?
The GAO foun d that the Department of Ener gy's R&D bud get w ent
from S1 billion in 1993 to $1.3 billion in 1995, and back ag ain to 51 billion
in 1996. H owever, electric util ity R&D fund ing over the same period of
tim e dr opped from 5708 million to $476 millio n. State energy programs
wer e also red uced. The GAO rep or t was limited to governm en t and
utility funding. Information on manufacturers R&D was not avai lab le.
The reduction s in utilit y R&D spending ob viou sly are significan t.
Ind eed , the National Association of Regulatory Util ity Comm issi oner s
rec omm end ed in 1992 that utilities devote 1% of their revenues to R&D.
In 1993, six of the 112 investor-own ed utilities met that target. Since then ,
all six have cu t ba ck their R&D spe nd ing subs tan tially