U.S. investor-owned utilities plan to spend at least $1.4 trillion on capital projects through 2030, a more than 21% increase from five-year projections outlined last year, nonprofit group PowerLines said in a report released on Tuesday.
The report, based on the analysis of 51 listed utility companies’ latest earnings calls, indicates that these increasing expenditures could lead to future requests for rate increases.
AI, Data Centers Drive Utility Costs
The primary drivers for this spending growth are the boom in AI power and the construction of data centers. However, other factors such as aging infrastructure, climate change, increasing electrification, and population growth have contributed to a 40% increase in utility bills since 2021, “with no signs of slowing down,” as per PowerLines. In 2025 alone, utilities sought $31 billion in rate hikes, stated the report.
Previously, Goldman Sachs projected global data center electricity use would rise 175% by 2030 from 2023 levels, revised up from 165%. U.S. electricity demand is projected to grow 2.6% annually through 2030, driven by data centers, marking a sharp acceleration compared to historical growth of under 2%.
PowerLines also pointed out that nearly half of all new spending is allocated for transmission and distribution, with another 30% directed towards new power generation.
“Investor-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,” said Charles Hua, Founder and Executive Director of PowerLines
Top Utilities Drive CapEx Surge
PowerLines found that just 10 utilities account for $707 billion, about 53%, of planned five-year CapEx, exceeding their ~44% share of consumers. While projections can shift, utilities' actual capital spending has closely matched forecasts—about 95% over the past decade, and has risen significantly, with further growth expected.
Based on the earnings call, Duke Energy (NYSE:DUK) at $102.8 billion, NextEra Energy (NYSE:NEE) at $94.2 billion, Southern Company (NYSE:SO) at $81.2 billion, Pacific Gas & Electric (NYSE:PCG) at $73.5 billion and American Electric Power (NASDAQ:AEP) at $72.0 billion were the top 5 utility companies with the highest proposed capital expenditures.
Maximizing Grid Efficiency First
PowerLines argues utilities should better use existing grid capacity, reducing wasted fossil and renewable energy, before building new plants, by adopting solutions like battery storage, virtual power plants, and AI-driven demand management. It also urges regulators to push cost-effective technologies that improve efficiency and lower consumer bills.
Meanwhile, Tom Content, Executive Director of Citizens Utility Board of Wisconsin, told PowerLines that utilities are poised to profit from rising infrastructure investments. However, he urged regulators to prioritize fair pricing for consumers, amid affordability concerns.
Tech Giants Sign Trump Ratepayer Pledge
The surge in utility spending comes at a time when companies like Bloom Energy (NYSE:BE) are expanding partnerships with tech giants like Oracle Corp (NYSE:ORCL) to support the buildout of AI and cloud computing infrastructure.
In March, The Trump administration announced a voluntary "ratepayer protection pledge" with major tech companies, including Microsoft Corp (NASDAQ:MSFT), Amazon.com, Inc. (NASDAQ:AMZN), Oracle Corp (NYSE:ORCL), Alphabet Inc.’s (NASDAQ:GOOG) (NASDAQ:GOOGL) Google, Meta Platforms, Inc. (NASDAQ:META), ChatGPT-parent OpenAI and Elon Musk’s xAI, to prevent AI data centers from driving up U.S. electricity costs.
Under the agreement, firms will fund their own power needs, pay for grid connection infrastructure, and potentially face separate electricity rates from consumers. Trump said the initiative would help reduce overall electricity costs.
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