Jan. 9 at 8:46 PM
Utilities plan to invest over
$1 trillion from 2025–2029 to meet AI energy demand, with capex for 47 utilities reaching
$230 billion in 2026, up 56% from 2022. This spending could drive earnings growth, as regulated utilities often recoup investments through rate increases.
Entergy and NiSource, which have major data center pipelines, are likely beneficiaries. Entergy will support Meta’s
$10B Louisiana data center with new gas plants, while NiSource gained approval for a separate power generation subsidiary in Indiana, allowing expanded capex and long-term fixed-rate contracts.
However, higher utility stock prices have lowered dividend yields: Entergy’s fell from 3.7% to 2.6%, and NiSource’s from 3.4% to 2.6%. Rising electricity costs and potential overcapacity from AI demand add risk.
$ETR $NI