Datacenters are hungry. The U.S. energy agency now projects record electricity use in 2025 and 2026 as AI training and inference ramp across hyperscalers. Regional grid operators are revising load curves higher, led by data-center-dense hubs. This isn’t a one-quarter story; it’s a multi-year buildout cycle that touches generation, transmission, and distribution.
Here’s the investable angle. First, regulated utilities earn returns on invested capital when they add approved assets to the rate base—wires, transformers, substations, and plants. If forecasts hold, regulators will see reliability as mission-critical, making it easier to green-light grid projects. Second, power scarcity can lift the value of dependable megawatts. That favors firms with nuclear fleets or flexible gas capacity while renewables plus storage scale to meet demand peaks. Third, sustained capex means steadier cash flows and dividend headroom—at a time when investors want income with growth.
Risks? Permitting delays, supply-chain bottlenecks, and project cost inflation. Also, if AI demand under-delivers, utilities could face regulatory pushback on spending plans. But the data trend is up and to the right: national demand hitting records, IEA* upgrades, and regional planners like PJM* marking higher load paths.
Bottom line: if “compute is capital,” then “power is rent.” The market may be underpricing how long this cycle runs—and which balance sheets will benefit.
📚 Decoder
IEA (International Energy Agency): Global energy market research organization.
PJM: Mid-Atlantic grid operator managing wholesale electricity markets.
⏱️ That’s this week’s Signal Spotlight.
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