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U.S. utilities and power generators are hiking their spending plans to record levels at the same time as consumer utility bills have surged to new highs\u2014and it\u2019s no coincidence.<\/p>\n
Investor-owned utility companies increased their capital spending plans by more than 27% to at least $1.4 trillion through 2030\u2014up from $1.1 trillion a year ago\u2014and that\u2019s not even counting privately held companies, according to a new report released Tuesday from the nonprofit PowerLines.<\/p>\n
The AI power boom and the wave of construction for data centers is the leading cause of new spending growth nationwide, but it\u2019s a convergence of spending causes that have triggered utility bills to spike about 40 percent since 2021\u2014\u201cwith no signs of slowing down\u201d\u2014PowerLines said.\u00a0<\/p>\n
In addition to the AI era, spending also is growing rapidly because of aging infrastructure, grid hardening from rising extreme weather events and climate change, growing electrification, and population growth. In fact, most of the growth in recent years is unrelated to AI, but the AI data center boom is widely expected to become the leading driver in utilities spending\u2014and consumer prices\u2014going forward.<\/p>\n
\u201cInvestor-owned utilities are signaling a record-breaking wave of capital spending, and history shows that those plans are often a leading indicator of future utility rate increase requests,\u201d\u00a0said PowerLines executive director Charles Hua in a statement.<\/p>\n
Utilities requested a record-high $31 billion in rate hikes in 2025 across the nation\u2014more than twice the near record from 2024\u2014as consumer and political backlash grows over rapid data center and power plant construction nationwide.<\/p>\n
Look to the South<\/p>\n
The biggest bulk of spending is in the South\u2014from Texas to Maryland\u2014where $572 billion in spending is planned. Next up is the Midwest with $272 billion in spending on the books.<\/p>\n
The South is home to both the nation\u2019s biggest population and manufacturing surge, as well as much of the data center growth from, again, Texas to Virginia\u2019s Data Center Alley.<\/p>\n
So it\u2019s no coincidence that the top three spenders are all southern. Charlotte-based Duke Energy leads the way with an industrywide, record-high spending plan of $103 billion over the next five years, while Florida-based NextEra Energy ranks second at $94 billion. And the aptly named, Atlanta-based Southern Company is next at $81 billion. The top non-southern utility is California\u2019s PG&E at almost $74 billion.<\/p>\n
Utilities spent much of their most recent quarterly earnings calls touting their efforts to prioritize consumer affordability and pointing out that hyperscalers and data center developers are increasingly adopting \u201cpay for your own power\u201d models.<\/p>\n
But not all developers are paying their own generation, and those that are paying for new power plants aren\u2019t necessarily covering the bills for the transmission and distribution components of infrastructure.<\/p>\n
Transmission and distribution accounts for nearly half of all new spending, while another 30% is geared toward new power generation, according to PowerLines.<\/p>\n
\u201cOur business model is hard to understand,\u201d said PG&E CEO Patricia Poppe in her most recent earnings call. \u201cAnd it\u2019s hard for people to believe and see that you can raise profits and lower rates all at the same time.\u201d<\/p>\n
While most utilities are focusing more on affordability, PowerLines said, \u201cmany utilities remain concerned that there is only so far they can go to stop costs from spiraling out of control while still remaining profitable. They argue that without major capital investments in the power system, consumers risk paying for outdated, unreliable, and even dangerous energy infrastructure.\u201d<\/p>\n
But PowerLines also contends that utilities can and should do more to utilize the existing capacity of the power grid. Too often existing fossil fuel-fired power plants sit idle when demand is weaker, or renewable energy facilities generate power that\u2019s wasted\u2014such as the wind blowing hard overnight when people are sleeping.<\/p>\n
Before building too many new power plants, utilities should utilize more tools to make the existing grid more efficient, such as more battery storage, virtual power plants, and other technologies, such as AI-powered grid flexibility solutions that essentially reduce power consumption from large consumers at times of peak load demand on the grid.<\/p>\n
\u201cOur century-old utility regulatory system has accelerated the size of the pie of utility capital spending, even when more cost-effective solutions that could lower consumers\u2019 utility bills are available yet under-deployed,\u201d Hua said. \u201cIt is incumbent upon state policymakers and regulators to ensure utilities prioritize these solutions that improve the efficiency, affordability, and reliability of the grid.\u201d\u00a0<\/p>\n
#U.S #utilities #plan #trillion #spending #spree #years #construction #boom<\/p>\n","protected":false},"excerpt":{"rendered":"
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