U.S. utility companies intend to invest $1.4 trillion by 2030 to support the growth of artificial intelligence.

      A report examining capital spending plans from 51 investor-owned utilities reveals that the expected $1.4 trillion investment is twice the amount spent in the previous decade. Over 30 utilities identified data centres as a primary growth factor. Average residential electricity prices are already anticipated to increase by 5.1% this year.

      US investor-owned utility firms plan to invest $1.4 trillion in electricity infrastructure from now until 2030, more than double the investments made in the last decade, as demand for electricity surges due to the data centre boom spurred by artificial intelligence. This is the key finding of a recent report from PowerLines.

      This nonpartisan nonprofit consumer advocacy group reviewed capital expenditure plans from 51 investor-owned utilities that collectively serve 250 million customers in the US.

      The $1.4 trillion figure shows an increase of over 20% from the utilities’ previous projections for 2025, with Fortune reporting a 27% rise from the $1.1 trillion forecasted a year ago.

      A majority of these utilities highlighted data centres as a significant factor in their capital spending plans, with more than 30 specifically naming data centres as a crucial area for growth and investment through 2030.

      In 2023, US data centres accounted for over 4% of the nation’s total electricity consumption, according to the MIT Energy Initiative; this share could increase to 9% by 2030, based on the same research.

      Deloitte’s 2026 Power and Utilities outlook predicts that the demand from data centres alone could reach 176 gigawatts by 2035, a fivefold increase from 2024 levels.

      Other factors contributing to the capital expenditure surge include aging infrastructure needing replacement, strengthening the grid against more severe weather events, increasing electrification of transportation and heating, and population growth. However, it is noted that much of the recent growth is not linked to AI; the data centre boom is expected to be the driving force moving forward.

      The implications for consumers are the most debated aspect of this situation. Utilities generally recover their capital expenses through rate increases sanctioned by state regulators, and electricity bills have already risen by roughly 40% since 2021, according to Fortune.

      A separate report from PowerLines earlier this year indicated that 56 million Americans will face higher utility bills due to rate hikes approved for 2025. The US Energy Information Administration forecasts further average residential electricity price increases of 5.1% in 2026.

      If current trends persist, PowerLines estimates that residential customers could bear nearly half of the $1.4 trillion in planned utility capital expenditures, approximately $700 billion.

      However, this outcome is not predetermined. PowerLines points out that large new electricity consumers such as data centres, if properly structured, could exert downward pressure on rates by enabling utilities to distribute fixed costs across a larger customer base.

      Drew Maloney, president and CEO of the Edison Electric Institute, expressed this viewpoint: “When more customers join the system, including large new users, we can more broadly share fixed costs, thereby putting downward pressure on rates for all customers.”

      The extent to which this occurs will depend on how state regulators allocate costs between residential and industrial customers as utilities manage an unprecedented investment cycle.

      Additionally, the grid is facing capacity constraints that exacerbate the investment challenge. Data from the North American Electric Reliability Corporation, as cited by Morningstar, indicates load growth has risen from an earlier estimate of 6.1% to about 11.6% over the next decade.

      Capacity auction prices in the PJM Interconnection, which manages the largest competitive wholesale electricity market in the US, have surged from historical averages below $100 per megawatt-day to capped levels exceeding $329 per megawatt-day for the 2026/27 and 2027/28 delivery years.

      At the same time, around two terawatts of capacity are currently stuck in interconnection queues, nearly double the existing installed capacity, according to Deloitte.