US electric utilities step up spending to power energy boom

US electric and gas utilities are preparing for a sharp acceleration in capital spending in 2026, as surging electricity demand, led by data centers and steady growth across residential, commercial and industrial users, forces a rethink of grid capacity and resilience.

Visible Alpha consensus estimates point to aggregate capital expenditure rising about 30% year-on-year in 2026 across a cohort of 15 listed US utilities. The spending is focused not only on modernizing ageing infrastructure to improve reliability, but also on expanding generation and transmission networks to accommodate new, power-hungry loads, particularly from AI-driven data centers.

The investment surge spans some of the largest US operators, including Constellation Energy Corp., Duke Energy Corp., Southern Co., NextEra Energy Inc. and American Electric Power Co. Inc., alongside peers such as Edison International and Xcel Energy Inc..

Among them, Constellation Energy (NASDAQ: CEG) is expected to post the most dramatic increase, with capital expenditure forecast to jump 128% year-on-year to $6.7 billion in 2026. Elsewhere, analysts expect broad-based double-digit growth. Entergy Corp. (NYSE: ETR) is seen lifting spending by 49% to $11.5 billion, while American Electric Power (NASDAQ: AEP) is projected to increase capex by 48% to $12.5 billion.

Larger-scale programs remain concentrated among the sector’s biggest players. NextEra Energy (NYSE: NEE), already the largest renewable energy developer in the US, is expected to spend $29.9 billion, up 24%, reflecting continued investment in clean energy and transmission. Southern Company (NYSE: SO) and Duke Energy (NYSE: DUK) are forecast to raise spending by 20% and 22% to $15.3 billion and $17.2 billion respectively.

This article was published by Visible Alpha, part of S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.