Funding the growth in the US power sector

Deloitte analysis of S&P Global Market Intelligence, “Utility capital expenditures final update for H2 2024,” accessed Dec. 23, 2024.

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US Energy Information Administration, “Electricity data browser: Average retail price of electricity – annual,” accessed Jan. 8, 2025.

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Deloitte analysis of S&P Global Market Intelligence, “Utility capital expenditures final update for H2 2024,” accessed Dec. 23, 2024.

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Deloitte analysis of LCRI Net-Zero 2050, “LCRI Net-Zero 2050: Sensitivity analysis and updated scenarios—Acknowledgments,” Dec. 19, 2024.

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Thomas Keefe, Kate Hardin, and Jaya Nagdeo, “2025 Power and Utilities Industry Outlook,” Deloitte Insights, Dec. 9, 2024; Marlene Motyka, Thomas Keefe, Kate Hardin, and Carolyn Amon, “2025 Renewable Industry Outlook,” Deloitte Insights, Dec. 9, 2024. 

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T. Bruce Tsuchida, Long Lam, Peter Fox-Penner, Akhilesh Ramakrishnan, Sylvia Tang, Adam Bigelow, and Ethan Snyder, “Electricity demand growth and forecasting in a time of change,” Brattle, May 2024; Chris Seiple, “Horizons Gridlock: The demand dilemma facing the US power industry,” Wood Mackenzie, October 2024. 

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Deloitte analysis of John D. Wilson, Zach Zimmerman, and Rob Gramlich, “Strategic industries surging: Driving US power demand,” Grid strategies, December 2024.

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Deloitte analysis of S&P Global Market Intelligence, “Utility capital expenditures final update for H2 2024,” accessed Dec. 23, 2024.

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Ibid.

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Ibid.

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Ibid.

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S&P Global Ratings, “Industry credit outlook 2024: North America regulated utilities,” Jan. 9, 2024, p. 5.

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NOAA National Centers for Environmental Information, “U.S. billion-dollar weather and climate disasters, accessed Jan. 21, 2025.

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Ibid. 

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S&P Global Ratings, “Industry credit outlook 2024,” p. 5.

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Kate Hardin and Suzanna Sanborn, “2024 Power and Utilities Industry Outlook,” Deloitte Insights, Dec. 4, 2023.

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Peter Martin, James Whiteside, Fraser McKay, and Srinivasan Santhakumar, “Conflicts of interest: The cost of investing in the energy transition in a high interest-rate era,” Wood Mackenzie, April 2024.

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John Fitzgerald Weaver, “Solar panel import tariffs are affecting the industry by increasing prices by up to 286%,” Pv magazine, June 6, 2024.

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Jeff St. John, “Don’t blame clean energy for rising electric bills,” Canary Media, July 15, 2024.

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Isabel Schwartz, Benjamin Boucher, Elysia Sheu, and Adam Pearson, “Navigating the impact of proposed tariffs on utility supply chains,” Wood Mackenzie, Jan. 16, 2025.

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Daniel Shea, “Performance-based regulation: Harmonizing electric utility priorities and state policy,” National Conference of State Legislatures, April 2023, pp 4–5.

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US Energy Information Administration, “Electricity data browser: Average retail price of electricity – annual.” 

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Dan Lowrey, “Underearning spread widens for gas, electric utilities in ROE analysis,” S&P Global, May 29, 2024; Shankar Chandramowli, Patty Cook, Justin Mackovyak, Himali Parmar, and Maria Scheller, “Power surge: Navigating US electricity demand growth,” ICF, August 2024, p. 13.

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S&P Global Ratings, “Industry credit outlook 2024,” p. 9.

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Morningstar, “Losing steam: Weakening credit metrics in the North American utilities sector,” May 15, 2024.

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EEI Quarterly Financial Updates, “Q3 2024: Credit ratings,” accessed January 2025; Deloitte analysis.

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Ethan Howland, “Utilities likely to continue selling non-core assets amid $745B in planned spending: Moody’s,” Utility Dive, Nov. 9, 2023.

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Moody’s Investors Service, “Rising capital expenditures will require higher annual equity funding,” Nov. 8, 2023.

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Deloitte analysis of S&P Global Market Intelligence, accessed January 2025.

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Deloitte Private Equity, “Sustainable infrastructure: A paradigm shift for private equity,” June 2024.

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American Electric Power, “AEP signs agreement to sell distributed resources business to Basalt,” press release, May 14, 2024.

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Deloitte Private Equity, “Sustainable infrastructure: A paradigm shift for private equity,” 

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Duke Energy, “Duke Energy to sell utility-scale commercial renewables business to Brookfield for $2.8 billion,” press release, June 12, 2023.

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Dominion Energy, “Dominion Energy successfully concludes noncontrolling equity partner process for Coastal Virginia offshore wind commercial project; announces highly credit-positive transaction featuring robust cost- and risk-sharing with high-quality and well-capitalized partner, Stonepeak,” press release, Feb. 22, 2024. 

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Ibid.

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ALLETE, “ALLETE enters agreement to be acquired by a partnership led by Canada Pension Plan Investment Board and Global Infrastructure partners to advance ‘sustainability-in-action’ strategy,” news release, May 6, 2024.

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Ibid.

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CISCO, “Data center map,” accessed January 2025.

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Deloitte analysis of data from S&P Global, Stream Data Center, Tax Notes, Electric Power Research Institute, US Department of Energy, National Renewable Energy Laboratory, and Smart Electric Power Alliance.

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Keefe, Hardin, and Nagdeo, “2025 Power and Utilities Industry Outlook.”

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BloombergNEF,“ Corporate clean power buying grew 12% to new record in 2023, according to BloombergNEF,” Feb. 13, 2024.

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Andreas Franke, “Data centers account for half of US clean energy procurement but only 20% in Europe: report,” S&P Global, Oct. 31, 2024.

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Keefe, Hardin, and Nagdeo, “2025 Power and Utilities Industry Outlook.”

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Brian Martucci, “Intersect Power, Google, TPG partner on up to $20B renewable energy push for data centers,” Facilities Dive, Dec. 18, 2024.

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Roberto Bocca, “Google joins Big Tech’s move into nuclear power, and other top energy stories,” World Economic Forum, Oct. 22, 2024.

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Allison Good, “Utilities poised for datacenter earnings boost, want clarity on cost recovery,” S&P Global Market Intelligence, April 18, 2024.

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Ibid.

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Paul Ciampoli, “Utility proposal would require 10-year payment commitment from data centers,” American Public Power Association, June 10, 2024.

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Shea, “Performance-based regulation.”

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Ibid.

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Mark Newton Lowry, Tim Woolf, and Lisa Schwartz, “Performance-based regulation in a high distributed energy resources future,” Lawrence Berkeley National Laboratory, January 2016, p. 14.

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Gennelle Wilson, Cory Felder, and Rachel Gold, “States move swiftly on performance-based regulation to achieve policy priorities,” RockyMountain Institute, March 31, 2022.

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Herman K. Trabish, “Upheaval in utility regulation emerging nationally as Hawaii validates a performance-based approach,” Utility Dive, July 5, 2022.

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National Grid, “What is an NWA?” company website, accessed August 2024.

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Based on Deloitte experience and analysis. The description of the areas included in figure 8 are as follows: Asset inspections: Identify key characteristics of assets and their health through Vision AI models. Vegetation management: Leverage AI models to predict vegetation growth and its potential impact on assets. Field worker assistant: Quickly provide professionals with pertinent environment, health, and safety (EHS) information via a generative AI–powered tool. Predictive failure: Enable autonomous prediction of asset failure events using real-time data and AI/machine learning models. Rate case GPT: Answer questions and consolidate information about historical and peer rate cases through an interactive agent. Regulatory risk and compliance: Assess the impact of regulatory or policy changes and efficiently generate required documentation or updates. Statement of work or request for proposal (SOW or RFP) generation: Develop RFPs, perform vendor analysis, and analyze RFP responses using gen AI. Knowledge management: Build an internal data set of policies and procedures with a gen AI chatbot to provide employees with information in real time. Contact center virtual agent: Create a virtual voice assistant that can quickly and efficiently remediate customer concerns. Service optimization: Issue warnings and alerts with expected resolution time for outages to customers using predictive AI. Transcript AI and sentiment analysis: Automate the analysis of customer calls to generate insights on customer satisfaction. Grid-edge computing: Provide real-time insights to enable a connected grid and improve grid reliability through AI for edge devices (smart meters). Transmission line planning: Analyze landscapes in transmission territories and design optimal pathways for new transmission lines. Model demand planning: Review operation and distribution planning models to identify disagreements and develop recommended updates. Outage prediction and management: Predict potential outages based on historical outage data, sensor data, load forecasts, weather information, etc. Battery storage: Cross-reference factors (geography, topology, load profile, etc.) to determine optimal battery storage locations for distributed energy storage programs.

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Deloitte analysis based on client projects.

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