Funding the growth in the US power sector

Electric companies are expected to make massive investments to modernize the grid to address growing electricity demand. Deloitte’s analysis outlines strategies to help fund this growth.

Marlene Motyka

United States

Keith Adams

United States

Micah Bible

United States

Kate Hardin

United States

Brian Boufarah

United States

Thomas L. Keefe

United States

Key takeaways

  • The US power sector is expected to require substantial and sustained capital investments over the next two to three decades to fund rising electricity needs. Investments could total US$1.4 trillion from 2025 to 2030—with similar expenditures until about 2050.1
  • The power sector’s costs are rising, and the complexity is deepening, with increasingly extreme weather and macroeconomic pressures contributing to cost increases.
  • The sector’s traditional funding avenues—filing rate cases and issuing debt and equity—may not suffice. Customer electricity bills rose 23% between 2019 and 2024, potentially leaving less room for further increases.2 High interest rates have often increased financing costs.
  • Some electric companies are exploring alternative funding avenues, such as government incentives, private capital, and cooperation with power-intensive sectors like the technology industry.
  • Private capital involvement in the power sector has grown since 2016, and some investors are adopting innovative investment paradigms. Many power and renewables companies have been selling unregulated assets, noncore businesses, and project platforms.
  • To help reduce costs and boost customer affordability, the power sector can also work with regulators to update the industry regulatory model, deploy more non-wire alternatives, and use artificial intelligence to achieve operational efficiencies.

Electric power companies are under pressure from customers, regulators, and ratings agencies to enhance the safety, reliability, and resiliency of the US electric grid while expanding output to serve rising demand. And all this must be addressed while keeping customer electricity bills affordable. Driven in part by the urgent need to modernize aging infrastructure, integrate renewable energy sources, and enhance grid resilience, the US power sector is expected to require sustained capital investments over the next two to three decades. Investments could total as much as US$1.4 trillion from 2025 to 2030—and possibly with similar expenditures until about 2050.3 Successfully financing this expansion will likely require a paradigm shift in funding strategies, bringing new entrants into the power industry, combining traditional and innovative mechanisms, making certain regulatory reforms, and furthering public-private collaboration.

Structural changes in electricity demand

After decades of relatively stable electricity demand, the United States is now experiencing a surge in power consumption due to electrification, artificial intelligence–driven data center expansion, and a resurgence in industrial reshoring of manufacturing. By 2030, power demand is expected to increase 10% to 17% from 2024 levels.4

  • Deloitte estimates data centers will drive approximately 44 gigawatts (GW) of additional demand by 2030. The estimate draws on a range of 26 GW to 33 GW in 2024 to 60 GW to 80 GW by 2030.5
  • An additional up to 10 GW of manufacturing demand could result from supply chain reshoring to meet domestic energy needs by 2030.6
  • Electric vehicles, the adoption of electric heat pumps for heating and cooling, and the electrification of industrial processes could contribute to further growth. The electrification of heating and transport could potentially add up to 20 GW of demand, by 2030.7

Significant expenditures are expected

To meet the expected increase in demand, the electric power sector is experiencing an unprecedented growth in capital investment. In 2024, the power sector’s capital investment reached an all-time high of approximately US$179 billion, following a period of sustained growth with a compound annual growth rate (CAGR) of over 8.5% over the past five years, from 2019 to 2024 (figure 1).8 This upward trend in capital investment is projected to continue, with capital expenditure (capex) spending by the largest utilities expected to reach at least US$194 billion in 2025.9

Looking ahead, industry-wide investments could total up to US$1.4 trillion from 2025 to 2030—equivalent to the industry’s spending over the previous 12 years combined, with similar levels of investment needed in the following decade and beyond.10

Much of the investment is directed toward generation assets, including building new natural gas and nuclear plants, as well as renewable energy sources; updating aging transmission and distribution systems; and implementing new technologies, such as smart meter deployment, smart grid systems, cybersecurity measures, and battery storage.11

Grid complexity and costs are rising

Electric utilities have long contended with challenges such as aging infrastructure, insufficient transmission capacity, and lengthy permitting and grid interconnection timelines. Some of these trends are intensifying, and new trends are emerging, often further boosting the complexity and costs of grid modernization and expansion.

Increasingly extreme weather and climate events

  • Extreme weather events are becoming more frequent, leading many utilities to boost spending on grid resilience, recovery, and insurance—in some cases impacting their credit ratings.12
  • In 2024 alone, there were a record 27 weather events that cost more than US$1 billion each.13 Such events have risen steadily since the 1980s, when there were on average 3.3 disasters per year that cost US$1 billion or more (inflation-adjusted).14
  • For utilities in many areas, the cost to mitigate, restore, rebuild, and cover liability claims from wildfires alone has skyrocketed. Areas designated as high wildfire risk have expanded across the country, and some utility credit ratings were downgraded in the past few years due to wildfire damages and liability.15

Macroeconomic pressures and trade policy

  • The global COVID-19 pandemic, and then later the Russia-Ukraine war, contributed to supply chain constraints and global inflation, which boosted the costs of materials, labor, shipping and fuel in the power sector.16
  • Some costs are easing, but high interest rates have contributed to rising utility debt levels (figure 2). The renewable energy industry was especially hard hit by high interest rates, due to its relative capital intensity and reliance on debt.17
  • Since 2012, tariffs have been imposed on some imported solar panels and other components. They have led to increased renewable energy and battery storage costs,18 though solar and wind are still the least expensive energy sources in many cases.19 Additionally, potential tariffs on Canada and Mexico could impact costs of some important equipment for the power sector such as transformers, circuit breakers, and switchgear.20

Traditional funding avenues may not suffice

US investor-owned electric companies have traditionally funded capital programs by filing rate cases with state regulatory commissions to recover the costs of investments through customer rate increases, and by issuing debt and equity.21 However, these avenues are facing growing limitations.

Utility-requested rate increases rose to record highs between 2020 and 2024 (figure 3), largely due to rising costs for grid maintenance, upgrades, and decarbonization. Fossil fuel price spikes, combined with these costs, increased retail electricity prices nearly 23% across all customer segments from 2019 to 2024, while residential prices climbed nearly 26%.22 These increases, combined with economy-wide inflation, also slowed the process for rate case approvals to recover capital investment costs, especially in the dynamic market in which incremental demand is likely to continue growing.23

Authorized increases on return on equity have lagged interest rate increases (figure 4), which can weaken the industry’s financial performance, putting downward pressure on credit quality.24

High interest rates and regulatory lag are also adding to financial challenges for utilities and raising the cost of debt financing. Combined with rising capex, this has caused some utilities to become overextended, making them more susceptible to credit rating downgrades.25 During three of the last five years (2020 to 2024), more utilities have had their credit ratings downgraded than upgraded (figure 5).26 Given the challenges around both raising debt and cash through rate cases, some utilities are planning to issue more equity to maintain a balanced mix of debt and equity.27 In 2025, utility holding companies are projected to source up to 14% of their annual capital investment from equity to fund their capital investment plans.28

Utilities are exploring alternative funding avenues

As traditional funding avenues may fall short, the industry is exploring alternative sources of funding. These include private capital markets, and investment from the technology sector and other corporates, as well as some government funds and incentives. In addition to seeking new funds, the industry could pursue several paths to further reduce costs and boost customer affordability, including revising the utility regulatory model as well as achieving operational efficiencies through non-wire alternatives and digital technologies.

Private capital could fill more funding gaps

Electric power companies and independent power producers are increasingly seeking private capital, such as private equity and infrastructure funds, to finance projects. Private capital involvement in the sector isn’t new, but it has surged in recent years, with annual average investment increasing by 113% since 2016 compared with the previous eight-year period (figure 6).29

The current administration’s focus on streamlining permitting could help modernize and secure the power grid, potentially attracting more capital into the sector. Private equity and infrastructure funds increasingly seek to invest in assets at the intersection of energy and technology, such as AI data centers and critical supply chain assets.30 These investors can deploy needed capital rapidly and multiply the impact of government investment in the transition.

Private investors are not only increasing the amount of capital they are deploying in the sector, but also adopting multiple financing strategies for expected power sector growth. Some electric companies are exploring new equity deals with private capital, while some renewable energy developers are involving private funds earlier in the project cycle. This can help the project offer lower rates to offtakers while also providing stable returns to investors.

Some of the types of deals that seem to be gaining traction at the intersection of electric power and private capital are:

  • Asset sales: Facing rising capital requirements and an increasingly expensive debt market, electric companies have been divesting nonregulated assets such as solar and wind plants, often to private equity and infrastructure funds.
  • Business sales: Some electric power companies have sold noncore businesses or minority interests in their regulated businesses to private capital investors. For example, in May 2024, American Electric Power signed an agreement to sell AEP OnSite Partners, a distributed resources business, to private equity firm Basalt Infrastructure Partners.31 While infrastructure investments can yield lower returns than other opportunities for private equity firms, their stability and long-term returns can make them attractive.32 This reasoning, as well as growth potential, may also be behind infrastructure funds’ investments in regulated utilities.
  • Platform investments: Beyond individual projects, private capital firms are increasingly acquiring portfolios of assets or businesses to achieve scale, consolidate fragmented markets, and optimize operations. For example, Duke Energy sold its unregulated utility-scale wind and solar development business to Brookfield Renewable Partners in a deal valued at US$2.8 billion in 2023.33
  • Strategic partnerships: Joint ventures between power companies and private capital funds are becoming increasingly common, enabling risk-sharing and access to expertise. One example is the sale of a noncontrolling interest from Dominion Energy Virginia to Stonepeak Infrastructure Partners to invest in a newly formed subsidiary to construct and operate an offshore wind farm.34 This regulated subsidiary will be a public utility in Virginia, able to recover prudently incurred costs,35 which could enable Dominion to improve its credit profile and access the additional capital needed to build the project while providing Stonepeak financial access to an entity earning regulated returns.
  • Electric utility transitioning to private ownership: In one instance, the need for capital led to an agreement for an electric company to be acquired by a private equity and infrastructure fund partnership.36 In 2024, Minnesota-based ALLETE Inc., which includes regulated utilities and renewable energy companies with a national footprint, is expected to be acquired by Canada Pension Plan Investment Board and Global Infrastructure Partners for US$6.2 billion, including the assumption of debt, pending regulatory approvals.37

Technology companies can help finance new energy technologies

The United States currently has more than 3,000 data centers located in all 50 states and the District of Columbia, but they are heavily concentrated in Northern Virginia, Texas, and Northern California.38 Many states offer data center incentives, which are present in the seven states where data centers’ share of total electricity consumed is expected to be highest in 2030 (figure 7).39

The expansion of data centers necessitates substantial investments in grid infrastructure and generation capacity, and estimates indicate that US utilities may need around US$36 billion to US$60 billion by the end of the decade.40

To help ensure reliable baseload power, some utilities may be considering multiple sources of electricity, including extending the life of existing coal assets and proposing new gas-fired capacity, while simultaneously exploring cleaner alternatives in the regions of increased demand. The largest companies in the technology sector have consistently been among the top corporate buyers of clean energy, whether through power purchase agreements with renewable project owners, green tariffs with utilities, or by other means.41 And, according to Deloitte’s analysis of data tracked by S&P Global Market Intelligence, solar and wind capacity contracted to US data centers has grown to nearly 42 GW through the third quarter of 2024, representing close to half of all renewables contracted to corporations in the United States.42 Additionally, nuclear energy’s ability to provide clean baseload power makes it an attractive option for many data centers. Utilities and technology companies are exploring different ways of integrating nuclear energy sources, including small modular reactors, in their portfolio.43 Technology companies are playing a role in financing new energy technologies, whether through direct investments in clean energy technologies or through engagement in innovative partnerships and regulatory initiatives.

  • Direct investments through partnerships: Technology companies, electric power companies, and private equity firms are forming partnerships to help accelerate the development and deployment of new energy technologies. In December 2024, Intersect Power partnered with Google and TPG Rise Climate, a subsidiary of private equity firm TPG, to invest up to US$20 billion in renewable power infrastructure to power new data centers and scale clean energy generation by the end of the decade.44

Additionally, some electric companies are working with technology companies to help finance construction of advanced energy technologies by signing power purchase agreements, which can help lower project risks. For example, Google has agreed to purchase energy under a deal that will support the first commercial deployment of Kairos Power’s advanced nuclear reactor by 2030 and a fleet totaling 500 megawatts (MW) of capacity by 2035.45

  • Support through new tariff approaches: Some utilities are proposing new tariff provisions that could help protect residential customers from potentially higher power bills caused by increased industrial use, such as from data centers. These tariff approaches have the potential to reduce the financial risk for utilities and enable investment in grid upgrades and new generation sources. Below are a few tariff provisions that utilities have requested from state regulatory commissions, some of which could become more common.
    • Upfront payments for data center hookups to utility infrastructure46
    • Accrued allowance for funds used during construction of new infrastructure, as it can sometimes take three to five years for a data center to begin operations and start consuming and paying for electricity after contract signing47
    • A 10-year commitment by data centers with more than 25 MW of demand to pay for a minimum of 90% of the electricity they’ve requested, even if they ultimately use less than what they initially expect to (this could be raised to 95% for cryptocurrency miners)48

The power sector could take further steps to reduce costs and boost affordability

While the industry works to address funding the expected growth, it could potentially improve the equation by reducing the amount of cash required through strategies such as working with regulators to further align regulatory incentives and pursuing operational efficiencies.

Regulatory reform could help align incentives to contain costs

One way to potentially achieve customer affordability is to provide utilities with incentives to contain costs through the regulatory model. Today, investor-owned utilities in most states operate under the “cost-of-service” regulatory (COSR) model,49 which can allow utilities to earn a guaranteed rate of return on investments that the state utility regulatory commission deems prudent and necessary, and to pass those costs on to customers through rate increases. This incentive implies that utilities could tend to overinvest in capital-intensive projects, such as generation, transmission, and distribution infrastructure, and underinvest in less capital-intensive alternatives, such as energy efficiency, demand-side management, and distributed generation.50 Research has shown this to be true even when these non-wire alternatives can meet customer needs at a lower cost than larger infrastructure investments.51

Regulators have explored rewarding utilities based on performance instead, with performance-based regulation (PBR), where they coordinate with utilities and legislators; they can also develop performance incentive mechanisms to incentivize utilities financially with quantifiable and measurable goals.52 While PBR can move the COSR model bias toward large capital expenditures and away from lower-cost alternatives, the shift from COSR to PBR may not be simple. It can be challenging for utilities to move to a new regulatory system, and potentially expensive until they’ve had time to earn incentives for meeting new performance goals.53 Changes to the current process could be designed to focus on:

  • Creativity, innovation, and balance to develop adequate metrics
  • A flexible stakeholder process to provide realistic timelines
  • Specific performance incentive mechanisms that reward utilities for achievements without over- or undercompensating them
  • An iterative process that leaves room for trial and error and incorporates lessons to improve the system

Achieving operational efficiencies can help boost customer affordability

In an era of rising capex, many electric companies are increasingly focusing on operational efficiencies to help manage costs, reduce funding needs, and maintain customer affordability. This often involves maximizing the output of existing assets and resources while minimizing waste. Some ways for electric utilities to achieve operating efficiencies include using non-wire alternatives and leveraging digital technologies.

Non-wire alternatives leverage a range of strategies, technologies, and programs to optimize the existing grid.54 They can deploy grid-enhancing technologies and advanced conductors to add capacity and flexibility to the existing transmission system, without the need for rebuilding transmission lines. Additionally, utilities can also leverage demand response, energy efficiency programs, and distributed energy resources such as rooftop solar, home energy storage, and smart thermostats. These alternatives can help manage the load more cost-effectively than investing in new generation or transmission infrastructure.

The adoption of digital technologies is also transforming how utilities operate and maintain the grid. Smart grid technologies, advanced data analytics, and cloud computing are all playing a role in improving operational efficiency. By leveraging these tools, utilities can optimize the reliability and resilience of the grid, predict and prevent outages, enhance customer service, and potentially unlock new revenue streams.

Increasingly, electric companies are turning to advanced AI applications, including generative AI, to help achieve greater efficiencies (figure 8).55 Some US-based electric utilities have implemented advanced AI models across a diverse range of mission-critical operations, such as:

  • Using remote sensing technology, including light detection and ranging (LiDAR) and aerial and advanced AI algorithms, to identify fire risks from vegetation encroachment near power lines
  • Combining AI with edge computing to automate mission planning and drone autonomy for asset inspections and prevent outages by detecting defects
  • Using satellite images to assess storm damage and inform resource deployment for faster service restoration56

 

Collaboration is key to future growth

In an environment of deepening complexity and challenges, electric companies are helping to forge the path to a more reliable, resilient, and affordable electric grid to accommodate rapid demand growth. Significant amounts of capital may be required—and the industry is turning to new funding sources while also seeking ways to contain costs. Reforming regulatory paradigms, deploying low-cost distributed and renewable energy sources, and pursuing operational efficiencies can help reduce costs. New funding avenues include collaboration with corporate partners and also with the private equity and infrastructure funds that are stepping into the market. This collaboration and innovation could help the industry deploy needed capital, pioneer innovative financing mechanisms, and engineer creative collaborations to help fund power sector growth.

By

Marlene Motyka

United States

Keith Adams

United States

Micah Bible

United States

Kate Hardin

United States

Jaya Nagdeo

India

Brian Boufarah

United States

Endnotes

  1. Deloitte analysis of S&P Global Market Intelligence, “Utility capital expenditures final update for H2 2024,” accessed Dec. 23, 2024.

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  2. US Energy Information Administration, “Electricity data browser: Average retail price of electricity – annual,” accessed Jan. 8, 2025.

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  3. Deloitte analysis of S&P Global Market Intelligence, “Utility capital expenditures final update for H2 2024,” accessed Dec. 23, 2024.

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  4. Deloitte analysis of LCRI Net-Zero 2050, “LCRI Net-Zero 2050: Sensitivity analysis and updated scenarios—Acknowledgments,” Dec. 19, 2024.

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  5. Thomas Keefe, Kate Hardin, and Jaya Nagdeo, “2025 Power and Utilities Industry Outlook,” Deloitte Insights, Dec. 9, 2024; Marlene Motyka, Thomas Keefe, Kate Hardin, and Carolyn Amon, “2025 Renewable Industry Outlook,” Deloitte Insights, Dec. 9, 2024. 

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  6. T. Bruce Tsuchida, Long Lam, Peter Fox-Penner, Akhilesh Ramakrishnan, Sylvia Tang, Adam Bigelow, and Ethan Snyder, "Electricity demand growth and forecasting in a time of change," Brattle, May 2024; Chris Seiple, "Horizons Gridlock: The demand dilemma facing the US power industry," Wood Mackenzie, October 2024. 

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  7. Deloitte analysis of John D. Wilson, Zach Zimmerman, and Rob Gramlich, “Strategic industries surging: Driving US power demand,” Grid strategies, December 2024.

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  8. Deloitte analysis of S&P Global Market Intelligence, “Utility capital expenditures final update for H2 2024,” accessed Dec. 23, 2024.

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  9. Ibid.

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  10. Ibid.

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  11. Ibid.

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  12. S&P Global Ratings, “Industry credit outlook 2024: North America regulated utilities,” Jan. 9, 2024, p. 5.

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  13. NOAA National Centers for Environmental Information, “U.S. billion-dollar weather and climate disasters, accessed Jan. 21, 2025.

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  14. Ibid. 

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  15. S&P Global Ratings, “Industry credit outlook 2024,” p. 5.

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  16. Kate Hardin and Suzanna Sanborn, “2024 Power and Utilities Industry Outlook,” Deloitte Insights, Dec. 4, 2023.

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  17. Peter Martin, James Whiteside, Fraser McKay, and Srinivasan Santhakumar, “Conflicts of interest: The cost of investing in the energy transition in a high interest-rate era,” Wood Mackenzie, April 2024.

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  18. John Fitzgerald Weaver, “Solar panel import tariffs are affecting the industry by increasing prices by up to 286%,” Pv magazine, June 6, 2024.

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  19. Jeff St. John, “Don’t blame clean energy for rising electric bills,” Canary Media, July 15, 2024.

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  20. Isabel Schwartz, Benjamin Boucher, Elysia Sheu, and Adam Pearson, “Navigating the impact of proposed tariffs on utility supply chains,” Wood Mackenzie, Jan. 16, 2025.

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  21. Daniel Shea, “Performance-based regulation: Harmonizing electric utility priorities and state policy,” National Conference of State Legislatures, April 2023, pp 4–5.

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  22. US Energy Information Administration, “Electricity data browser: Average retail price of electricity – annual.” 

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  23. Dan Lowrey, “Underearning spread widens for gas, electric utilities in ROE analysis,” S&P Global, May 29, 2024; Shankar Chandramowli, Patty Cook, Justin Mackovyak, Himali Parmar, and Maria Scheller, “Power surge: Navigating US electricity demand growth,” ICF, August 2024, p. 13.

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  24. S&P Global Ratings, “Industry credit outlook 2024,” p. 9.

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  25. Morningstar, “Losing steam: Weakening credit metrics in the North American utilities sector,” May 15, 2024.

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  26. EEI Quarterly Financial Updates, “Q3 2024: Credit ratings,” accessed January 2025; Deloitte analysis.

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  27. Ethan Howland, “Utilities likely to continue selling non-core assets amid $745B in planned spending: Moody’s,” Utility Dive, Nov. 9, 2023.

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  28. Moody’s Investors Service, “Rising capital expenditures will require higher annual equity funding,” Nov. 8, 2023.

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  29. Deloitte analysis of S&P Global Market Intelligence, accessed January 2025.

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  30. Deloitte Private Equity, “Sustainable infrastructure: A paradigm shift for private equity,” June 2024.

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  31. American Electric Power, “AEP signs agreement to sell distributed resources business to Basalt,” press release, May 14, 2024.

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  32. Deloitte Private Equity, “Sustainable infrastructure: A paradigm shift for private equity,” 

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  33. Duke Energy, “Duke Energy to sell utility-scale commercial renewables business to Brookfield for $2.8 billion,” press release, June 12, 2023.

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  34. Dominion Energy, “Dominion Energy successfully concludes noncontrolling equity partner process for Coastal Virginia offshore wind commercial project; announces highly credit-positive transaction featuring robust cost- and risk-sharing with high-quality and well-capitalized partner, Stonepeak,” press release, Feb. 22, 2024. 

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  35. Ibid.

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  36. ALLETE, “ALLETE enters agreement to be acquired by a partnership led by Canada Pension Plan Investment Board and Global Infrastructure partners to advance ‘sustainability-in-action’ strategy,” news release, May 6, 2024.

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  37. Ibid.

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  38. CISCO, “Data center map,” accessed January 2025.

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  39. Deloitte analysis of data from S&P Global, Stream Data Center, Tax Notes, Electric Power Research Institute, US Department of Energy, National Renewable Energy Laboratory, and Smart Electric Power Alliance.

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  40. Keefe, Hardin, and Nagdeo, “2025 Power and Utilities Industry Outlook.”

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  41. BloombergNEF,“ Corporate clean power buying grew 12% to new record in 2023, according to BloombergNEF,” Feb. 13, 2024.

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  42. Andreas Franke, “Data centers account for half of US clean energy procurement but only 20% in Europe: report,” S&P Global, Oct. 31, 2024.

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  43. Keefe, Hardin, and Nagdeo, “2025 Power and Utilities Industry Outlook.”

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  44. Brian Martucci, “Intersect Power, Google, TPG partner on up to $20B renewable energy push for data centers,” Facilities Dive, Dec. 18, 2024.

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  45. Roberto Bocca, “Google joins Big Tech's move into nuclear power, and other top energy stories,” World Economic Forum, Oct. 22, 2024.

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  46. Allison Good, “Utilities poised for datacenter earnings boost, want clarity on cost recovery,” S&P Global Market Intelligence, April 18, 2024.

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  47. Ibid.

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  48. Paul Ciampoli, “Utility proposal would require 10-year payment commitment from data centers,” American Public Power Association, June 10, 2024.

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  49. Shea, “Performance-based regulation.”

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  50. Ibid.

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  51. Mark Newton Lowry, Tim Woolf, and Lisa Schwartz, “Performance-based regulation in a high distributed energy resources future,” Lawrence Berkeley National Laboratory, January 2016, p. 14.

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  52. Gennelle Wilson, Cory Felder, and Rachel Gold, “States move swiftly on performance-based regulation to achieve policy priorities,” RockyMountain Institute, March 31, 2022.

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  53. Herman K. Trabish, “Upheaval in utility regulation emerging nationally as Hawaii validates a performance-based approach,” Utility Dive, July 5, 2022.

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  54. National Grid, “What is an NWA?” company website, accessed August 2024.

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  55. Based on Deloitte experience and analysis. The description of the areas included in figure 8 are as follows: Asset inspections: Identify key characteristics of assets and their health through Vision AI models. Vegetation management: Leverage AI models to predict vegetation growth and its potential impact on assets. Field worker assistant: Quickly provide professionals with pertinent environment, health, and safety (EHS) information via a generative AI–powered tool. Predictive failure: Enable autonomous prediction of asset failure events using real-time data and AI/machine learning models. Rate case GPT: Answer questions and consolidate information about historical and peer rate cases through an interactive agent. Regulatory risk and compliance: Assess the impact of regulatory or policy changes and efficiently generate required documentation or updates. Statement of work or request for proposal (SOW or RFP) generation: Develop RFPs, perform vendor analysis, and analyze RFP responses using gen AI. Knowledge management: Build an internal data set of policies and procedures with a gen AI chatbot to provide employees with information in real time. Contact center virtual agent: Create a virtual voice assistant that can quickly and efficiently remediate customer concerns. Service optimization: Issue warnings and alerts with expected resolution time for outages to customers using predictive AI. Transcript AI and sentiment analysis: Automate the analysis of customer calls to generate insights on customer satisfaction. Grid-edge computing: Provide real-time insights to enable a connected grid and improve grid reliability through AI for edge devices (smart meters). Transmission line planning: Analyze landscapes in transmission territories and design optimal pathways for new transmission lines. Model demand planning: Review operation and distribution planning models to identify disagreements and develop recommended updates. Outage prediction and management: Predict potential outages based on historical outage data, sensor data, load forecasts, weather information, etc. Battery storage: Cross-reference factors (geography, topology, load profile, etc.) to determine optimal battery storage locations for distributed energy storage programs.

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  56. Deloitte analysis based on client projects.

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Acknowledgments

The authors would like to extend their heartfelt gratitude to Suzanna Sanborn for her invaluable contributions to the development of this study. Her extensive industry expertise was instrumental in shaping the paper, ensuring that the research is both refined and comprehensive. Although Suzanna has retired from the firm, her profound impact on this project and her enduring legacy of excellence continue to be deeply appreciated.

The authors would also like to thank Akash Chatterjee, Pankaj Bansal, and Jayesh Prabhu, who provided research and analysis for this article. Additionally, they would like to acknowledge Adrienne Himmelberger, Khalid Behairy, Subhani Syed, and Katie Gibson for their subject matter expertise and review; Kim Buchanan and Randy Brodeur for driving the marketing strategy and related assets; Alyssa Weir for her leadership in public relations; and Clayton Wilkerson, Elizabeth Payes, Aditi Rao, Aparna Prusty, Molly Piersol, and Harry Wedel for operational, editorial, and graphics support.

Cover image by: Rahul Bodiga

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