Electricity prices in the U.S. are increasing to the point where — as Latitude Media executive editor Stephen Lacey said on Open Circuit last year — they’re the new “price of eggs” in political rhetoric.
It looks like things are about to get worse. New research from PowerLines found that utilities are gearing up to spend even more: $1.4 trillion over the next five years across 51 investor-owned utilities. That’s up more than 20% from last year’s estimate as they grapple with rising demand.
“That is a tremendous amount of spending,” said PowerLines executive director Charles Hua onstage at Latitude Media’s Transition-AI conference on Tuesday. “It’s like three interstate highway systems worth of spending; it’s thousands of Hoover Dams worth of spending.”
Many of the plans still need to get the regulatory green light from regulators. But taken together, they’re a clear indication that electricity customers could be in for further rate increases in a moment when electricity costs are already 5% higher than last year. And it’s not entirely clear from the plans how much of that new spending is an absolute necessity to keep the already over-taxed grid functioning.
Much of that capital will be spent on replacing poles and wires that are reaching end of life, Hua told me in our fireside chat about affordability. But the industry has both a lack of transparency and regulatory accountability, which means it can be hard to parse how much they’re also planning for “the nice-to-have stuff,” also called gold-plating, that isn’t necessarily in the interest of the consumers footing the bill — be they residential customers, or large commercial loads like data centers.
Of course, there’s the public perception that those data centers are actually at the root of the affordability problem. This all came to a head last month, when the White House seemingly found that having hyperscalers pledge to “pay their own way” for energy infrastructure could win them points with voters.
That said, rising rates have many contributors, from transmission and distribution costs to extreme weather recovery. In fact, an analysis by Lawrence Berkeley National Lab last fall found that new data centers and manufacturing facilities were actually correlated with slightly lower retail electricity prices in the last five years, because they allow fixed costs to be spread out over more demand. Data centers have nonetheless become a bipartisan punching bag, especially in PJM.
The decisions that inform electricity bills the most happen at the state regulator level. And when it comes to the enormity of load growth, U.S. utility commissions have been caught largely unprepared. They are deer caught in the headlights: They don’t want to be seen as stymying economic activity associated with AI. And historically they’ve had a pattern of just saying yes to everything that utilities say is needed.
But when that leads to record-high rates and an angry public, things get complicated — both for the regulators themselves and for the developers trying to site projects.
At Transition-AI 2026 this week, Hua and I spoke about all of these factors, and why parsing them can get so complicated. Below, find excerpts of our conversation, edited for brevity and clarity.
In 2025, utilities requested a combined $31 billion in rate increases across the U.S. And this year, the U.S. has reached a fever pitch when it comes to political and consumer pressure on rates. But how did we get here?
Charles Hua: Frankly, this has always been an issue. But suddenly now it’s entered our political discourse, and that’s reshaping the ways in which we’re talking about energy affordability. There are a couple reasons for that, one of which is data centers and the role that they could be playing — or not playing — in driving up bills. But certainly there’s a perception among the public that that’s a key cause.
We’re also now seeing the middle class engage on these issues because they’re feeling the pressure around utility bills. And we’re seeing elected officials and politicians talk about this because they’re feeling the pressure from the river. So that’s creating the storm where energy affordability is reshaping the entire energy landscape.
What is the tenor of your conversations with regulators, specifically when it comes to their preparedness for these rates?
Charles Hua: We like to call the public utilities commissioners in the U.S. “the Supreme Court justices of energy,” because there are 200 of them and they oversee $200 billion a year in utility spending. At a billion dollars a commissioner, they are incredibly powerful.
And they need to hear from everybody in this room in terms of what the pain points and bottlenecks. The two things that are most on their minds are the same things that are on all of our minds, which is load growth and affordability. How do I meet new demand, and how do I do so with affordability top of mind?
Many of these PUCs are working grueling hours around the clock — 60, 70, 80 hours a week. And they’re often doing so with staffs of a few dozen people. They have to regulate not just the electric companies, but also the gas, the water, telecommunications, rail safety, pipeline safety, public transit in some instances. So their jobs are incredibly difficult, and I don’t think they’ve been resourced enough to be able to meet this moment. And so I think there’s a lot more that needs to be done to just understand, what’s the psychology of a regulator and to engage effectively.
The FERC chair recently said at CERAWeek that she wants to see data center companies and developers engage more with FERC. And I think that’s a critical opportunity.
You’ve surveyed the entire country on this question: What’s real in terms of what data centers are doing to influence these rate requests?
Charles Hua: There’s this idea that rising demand automatically means rising prices, because that’s what you’re taught in Econ 101. But what econ 101 also teaches you is that if there’s a monopoly, that paradigm can’t exist — and that is what we’re talking about with utilities. What actually is a driver of cost, especially in vertically integrated utilities, is the supply side.
Now to be clear, there are definitely instances where demand does impact price, the most prominent being PJM in the capacity options market, which is not your entire bill but is a component. In that case, what we saw was constrained supply and rising demand led to this rupture, such that capacity action prices significantly spiked, and consumers felt that.
But across the rest of the country, load growth has actually been correlated with a reduction in rates. Georgia Power is doing this. There are other examples across the country. But what it ultimately comes down to is making sure that you’re minimizing your numerator, which is new capital spend, and you’re maximizing the denominator of rising demand, so that you’re basically putting downward pressure on that fraction, which is the electricity price.
