US utilities are boosting five-year spending plans to record heights to chase an unprecedented wave of data-center driven electricity demand.
The sector outlined during the last batch of quarterly announcements hundreds of billions of dollars in investment for plans to support the power needs of artificial intelligence (AI) development that dwarf traditional load growth.
Dominion Energy boosted its five-year capital expenditure (capex) plan to $65bn, citing accelerating demand in Virginia's "Data Center Alley." Southern Company lifted its program to $81bn, calling the moment a "watershed" for economic development across the Southeast as hyperscaler projects stack up. In Texas, Oncor raised its plan to a record $47.5bn, driven by a deluge of data center requests. Duke Energy raised its spending plan to $103bn, which the company said is the largest among regulated utilities.
The moves underscore how the country's biggest data center markets are retooling their grids — adding transmission and gas-fired generation, hiking nuclear uprates, and extending the lives of coal assets facing closure — to keep pace with multi gigawatt loads that surpass existing capacity.
The enormity of the investment figures and the scale of the projects call into question whether the forecasts are justified or even feasible.
"Utilities generally adjust their large-load forecasts based on requests they are receiving from potential customers, so the increases from last year are well justified under a traditional load forecasting methodology," said Julia Hoos, head of USA East, at Aurora Energy Research. "That said, the more projects are asking to be interconnected, the more skeptical we have to be about them being realized."
Pressure in the pipeline
Gas and power utility Southern said its large-load pipeline in Alabama and Georgia grew to over 75GW. Texas distributor Oncor said its queue stood at an astonishing 225GW, or about a fifth of current US power generation capacity which is greater than the capacity of many industrialized nations like France and the UK.
"Very few forecasts are taking into account the likelihood that large loads are shopping around with multiple utilities or that projects are often very delayed," said Hoos.
Dominion, whose service territory covers the largest concentration of data centers in the world in northern Virginia, appeared to acknowledge such concerns by defining how it decided which companies qualify as pipeline projects.
"Our forecasted data-center demand through 2045 is more than covered by existing signed ESAs (energy service agreements) and CLOAS (construction letter of authorizations)," said chief financial officer Steven Ridge. "By working diligently through the existing backlog and connecting the existing projects under construction, we'd achieve our demand forecast for the next approximately 20 years."
The rapid expansion of data centers has ignited concerns that utilities will shift the cost of new power plants and transmission upgrades onto households, driving up monthly electric bills. Rising consumer frustration over higher electricity prices has made the issue a flashpoint for regulators and utility executives alike.
President Donald Trump highlighted these concerns during his State of the Union speech, announcing, without details, that he is negotiating a ratepayer protection pledge that would require major technology firms to construct and fund their own dedicated generation.
