The latest so-called Beige Book on economic conditions as described by the Kansas City Federal Reserve Bank indicated there was moderate growth when it comes to electric power generation in the states that make up the Tenth District, including Oklahoma.
At the same time, electric rates will likely continue to rise.
“Electric power generation capacity in the Tenth District grew moderately in recent months, driven by a mix of new wind and solar investments,” stated the book, which is published eight times a year by the Federal Reserve. The book offers a snapshot of business conditions in each of the Fed’s 12 regional Reserve Bank Districts.
“Several contacts in the power and renewables industries reported utilities and power producers are carrying forward many planned renewable energy investments decisions despite recent or anticipated policy changes. Still, contacts noted that rising equipment costs, supply chain uncertainty, and energy policy uncertainty are putting marginal projects on hold in the near term,” continued the Beige Book.
“Developers emphasized they are looking to advance only those “no regret” investments in smaller projects with swifter payback periods. Overall, contacts anticipated rising retail electricity prices in the coming years, driven by strong demand and constrained supply.”
The same report showed “overall activity” in the district “declined moderately in recent weeks” across several sectors of the regional economy. There was a drop in consumer spending as well. The book also a less than positive prediction in the months to come.
” Contacts indicated they expected consumer demand will further weaken in coming months but expressed high levels of uncertainty about the outlook for household spending,” it concluded.
“Businesses in both consumer and industrial sectors described a cautious approach to capital expenditures, looking only to pursue “no regret” investments that have shorter payback periods, are smaller in scale, and are less sensitive to policy developments. The near-term outlook for capital spending remained favorable but contacts expressed greater uncertainty about investment activity for the coming years.”
