Significant change is coming to the U.S. economy as the world reacts to President Donald Trump’s tariff policy.
While this change isn’t evident on U.S. store shelves just yet, there are reports that an increasing number of large cargo ships bound from China are heading to Europe and other Asian countries, rather than to American ports.
The energy sector is rife with concerns about cost and supply chain impacts on components for solar panels, batteries and transformers. The biggest impact comes from Trump’s decision to raise tariffs on Chinese imports to 145%. But those at the top of the food chain remain insulated, at least in the short term.
In first-quarter earnings calls, leaders from eight of the largest U.S. utilities struck a common tone: While the proposed tariffs could introduce new pressures, they are largely well-positioned to absorb or sidestep tariff risks, thanks to proactive supply chain management, contract protections and long-term planning.
“Modest and Manageable”
All of the utility executives quoted in this article said, in one way or another, that they did not expect a material impact to their financial forecast.
Bob Frenzel, President and CEO of Xcel Energy, said the utility estimates a total tariff exposure of 2-3% on its $45 billion base capital plan for 2025 to 2029. He said that impact could be lowered through any incremental mitigation actions taken with vendors.
“The impacts are both modest and manageable,” said Frenzel, adding that “a majority” of the utility’s material-based capital expenditures are sourced in the U.S.
FirstEnergy’s tariff exposure represents less than 0.2% of its $28 billion capital investment program, utility President and CEO Brian Tierney told investors during the company’s Q1 earnings call on April 24.
“We expect any meaningful increases in our CapEx program to be driven by increased investment opportunity rather than supply chain pricing,” said Tierney.
Southern Company similarly projected confidence when discussing possible tariff impacts.
“Among the advantages for a company of our scale is a large portfolio of suppliers and strong vendor relationships to help navigate such challenges collaboratively and proactively,” said Southern Co. CEO Chris Womack.
Dominion Energy’s Q1 2025 earnings call highlighted the evolving impact of U.S. tariffs on its Coastal Virginia Offshore Wind (CVOW) Project.
As of the end of Q1, Dominion said the project had incurred $4 million in actual tariff costs. If current U.S. tariff policies remain in effect through the end of Q2 2025, this figure is expected to rise to approximately $120 million, according to figures shared with investors. To reflect anticipated tariff costs through Q2, Dominion increased the project’s total cost by $120 million, bringing the overall budget to $10.8 billion.
Should these policies continue through the project’s expected completion at the end of 2026, cumulative tariff exposure could reach roughly $500 million, the utility shared. Dominion’s share of this total would be around $130 million, due to cost-sharing arrangements.
Importantly, Dominion emphasized that tariff uncertainty has not affected the CVOW’s schedule or its supply chain. All raw materials have already been purchased, and component fabrication is underway. Siemens Gamesa, the turbine supplier, has begun production on time and is currently slightly ahead of schedule, company executives said.
“We feel very confident about our ability to get the materials, the components that we need,” said Bob Blue, Dominion President and CEO.
Blue told investors that tariff impacts across Dominion Energy’s entire business were manageable.
Losing no Sleep?
NextEra Energy President and CEO John Ketchum perhaps projected the most confidence about the company’s position and response to evolving trade policy.
Ketchum noted that NextEra faces up to $150 million in tariff exposure through 2028, representing less than 0.2% of its planned $75 billion capital investment. That’s before accounting for trade protection clauses built into its customer contracts.
He said the company’s efforts in diversifying and domesticating its supply chain to manage potential disruptions have far preceded the second Trump administration.
“We didn’t just wake up on November 6 and say, ‘Oh my God, what do we do about our supply chain?’” Ketchum explained on NextEra’s Q1 call last month.
Key moves he said have helped reduce the company’s risk include not sourcing solar panels from countries affected by anti-dumping and countervailing duties. Ketchum said the company also made arrangements to purchase U.S.-made batteries for a significant portion of its backlog, with the remainder of the batteries sourced outside of China, where tariff exposure is contractually allocated to the supplier.
“Our battery sourcing strategy gives us optionality and favorable pricing through our already-secured domestic battery supply contracts,” he told investors.
Ketchum added that for those non-U.S. suppliers, NextEra’s purchasing power and contract structure provide strong incentives to ensure customer accountability.
“I lose no sleep over whether or not our suppliers will follow through on their commitments and deliver into the U.S.,” he said.
For Entergy, the majority of the tariff dollar impact is toward the back end of its forecast period, in 2027 and 2028, which gives the utility time to diversify its supply.
“To mitigate potential impacts, we are working with our suppliers to develop alternative supply sourcing strategies,” said Drew Marsh, Entergy Chair and CEO.
As of now, Marsh said Entergy estimates the tariff impact to be approximately 1% of its four-year, $37 billion capital plan.
Executives for Pennsylvania-based PPL Utilities said it was “well-positioned” to manage the Trump administration’s trade policy and spoke of tariff impacts in the context of its two battery storage projects.
One of the batteries, a 125 MW project to be installed at the E.W. Brown Generating Station, is already under construction. Joe Bergstein, Executive Vice-President and Chief Financial Officer, said conversations with that vendor are ongoing to minimize any impacts.
The second project, a proposed 400 MW battery storage project at the Cane Run Generating Station, would come online in 2028.
“With that second unit, we have time to work through that,” said Bergstein. “We’ll continue to do that with a variety of vendors that are manufacturing batteries.”
Up North, Michigan’s DTE Energy also said it was well-positioned to manage the tariffs, citing an impact of 1-2% of its capital plan.
CEO Jerry Norcia emphasized that 80%–85% of the company’s capital expenditures are on services, which are largely unaffected by tariffs. For the remaining material-related spend, DTE executives said the utility has taken proactive measures by building up inventory, partnering with domestic suppliers and encouraging the onshoring of manufacturing for critical components like inverters, transformers and solar panels.
On the solar front, DTE has safe-harbored solar panels and now has enough inventory in warehouses to complete projects through 2027, the company told investors. The utility has battery storage in its resource plan but has not made any purchases yet, giving it flexibility to adapt if tariff pressures increase.
Norcia said the company sees tariffs, following incentives from the U.S. Inflation Reduction Act (IRA), as accelerating domestic manufacturing trends, which could strengthen the utility’s position further.
“There are [manufacturing] plants that are opening up, there are plants that are already open,” said Norcia, “so it’s quite an interesting opportunity for a more holistic perspective for our service territory and for the country.”