Investor-owned utilities are planning a significant increase in capital spending over the next five years, according to a new analysis released by PowerLines.
The report, Utility Spending is Rising: A Review of Utility Capital Expenditure Plans, examines 51 recent earnings calls and finds that utilities expect to invest at least $1.4 trillion in capital expenditures through 2030. That represents a more than 21% increase over the $1.1 trillion outlined for a comparable five-year period in the previous year. Capital expenditures typically include investments in physical infrastructure such as power plants, transmission lines, and distribution systems.
“Investor-owned utilities are signaling a record-breaking wave of capital spending, and history shows that those plans are often a leading indicator of future utility rate increase requests,” said Charles Hua, founder and executive director of PowerLines. “Our century-old utility regulatory system has accelerated the size of the pie of utility capital spending, even when more cost-effective solutions that could lower consumers’ utility bills are available yet underdeployed. It is incumbent upon state policymakers and regulators to ensure utilities prioritize these solutions that improve the efficiency, affordability, and reliability of the grid.”
The planned increase comes as utility bills have risen sharply in recent years. According to the analysis, bills have increased by about 40% since 2021, with continued upward pressure expected. In 2025, utilities requested $31 billion in rate increases, while electricity and natural gas costs became leading contributors to inflation.
Although capital spending does not directly translate to rate increases on a one-to-one basis, such plans are often viewed as an early indicator of future rate cases. The report suggests that rising capital costs could play a major role in shaping rate increase requests over the next several years.
Reactions
“As utilities plan any infrastructure investments, it’s critical that regulators ensure costs are allocated fairly,” said Jenn Jones, Vice President of Financial Security and Livable Communities at AARP. “Consumers—especially older adults and households on fixed incomes—should not be asked to subsidize costs driven by large new industrial demands or private development decisions.”
“When we’ve looked under the hood at the justifications for utility capital expenditures, we’ve often found that utilities are overlooking cheaper alternatives that involve operating expenditures,” said Citizens Utility Board of Michigan Executive Director Amy Bandyk. “Regulators and intervenor groups need to take a close look at these utility plans for massive spending before they drastically worsen the electricity unaffordability problem for ratepayers.”
“Large industrial customers depend on affordable and reliable electricity, which is the backbone of our modern economy. With projections of significant load growth, utilities are seeking to ratchet up their spending precisely when electricity costs, a key input into the cost of doing business, are already rising,” said Karen Onaran, President & CEO of the Electricity Consumers Resource Council (ELCON). “Going forward, we urge regulators to demand transparent justification for these expenditures as well as a demonstration that utilities have explored lower cost options to ensure that spending is prudent, transparent, and in the interests of all customers. Getting this right matters not only for affordability but also for economic competitiveness and long-term growth.”
“At a time of amped up concern about affordability and rate hikes well above inflation, utilities are seeing dollar signs for their future bottom lines from the unprecedented wave of new infrastructure investment,” said Tom Content, Executive Director of Citizens Utility Board of Wisconsin. “Regulators and legislatures need to be squarely focused on policies that put affordability and fairness first for the folks paying the bills.”