Sandy Aftermath Creates Opening for Utilities: Pro
A Northeast region punch-drunk from powerful storms could create opportunities for a handful of utility companies, as governments move to rebuild battered infrastructure, an analyst told CNBC on Thursday.
More than a week after super storm Sandy blew through the region, swaths of New York City and New Jersey are still grappling with power outages and damage.
The rebuilding can create "an uptick in opportunity for the companies that helped provide recovery support," said Christine Tezak, analyst at Clearview Energy Partners.
Tezak added that in the wake of the storm and this week's nor'easter, state and local governments might have incentive to modernize their infrastructure in ways that may help prevent future disasters.
"We've definitely got an opportunity to improve the infrastructure for a lot of areas," Tezak said. That could include putting overground power lines underground — a move Tezak says is potentially more expensive for consumers because of building costs.
Power distribution facilities initially run somewhere in the range of $100,000 to $150,000, the analyst said. However, pulling those same lines underground raises the cost exponentially, according to Tezak's estimates, to perhaps as high as $2 million.
It depends "on what you have to do to underground it, the type of soil, [and] what duct work," she said. "Do you have water you need to go around, do you have to prevent other sorts of infiltration" are questions governments and utilities have to ask.
Thousands of customers remain without power, with local officials and utilities having been stymied by the storm. Still, Tezak said she felt there was little utility companies could have done better that would have prevented parts of the system from going down.
"I was really surprised that, in a good way, that Con-Ed took the pre-emptive step of shutting down so much of Manhattan," she said.
"If you were in the affected area, it didn't feel very good but they positioned themselves so that they could quickly de-water the facilities," Tezak said. "The equipment would be as protected as possible."
—By CNBC.com's Javier E. David
Additional News: Cost of Sandy's Destruction in NY $33 Billion: Cuomo
CNBC Data Pages:
- Dow 30 Stocks—In Real Time
- Oil, Gold, Natural Gas Prices Now
- Where's the US Dollar Today?
- Track Treasury Prices Here
No disclosure information was available for this analyst.