AI is a windfall for utilities. It’s also a political headache

The structure of regulated utilities in the U.S. is their greatest strength but also their greatest vulnerability. The exact structure varies from state to state, but broadly, utilities are granted exclusive territories in exchange for an obligation to serve and regulation that allows them to recover approved costs and earn a set return on invested capital.

That approach has made investor-owned utilities reliably profitable but not huge growth businesses.

The AI boom—and the rising electricity demand that has followed—is changing that calculus. The Edison Electric Institute, the trade group for investor-owned electric utilities, said earlier this year that its companies would spend more than $1 trillion to meet this demand by 2030. 

As they build out the grid and add power generation to meet the demand, suddenly their profits are poised to grow and stock prices have risen to reflect that. 

But the budding voter and consumer backlash to higher prices threatens to throw a wrench in those plans. Over the summer, I wrote about growing public consternation in Georgia about rising electricity bills as Georgia Power, the state’s monopoly utility, plans a massive infrastructure buildout.

Read more | TIME