Utilities asked regulators for a record $23.1 billion in rate hikes this year to fund the AI power buildout
Investor-owned utilities asked regulators for a record $4.5 billion in rate increases last quarter, part of $23.1 billion so far this year, to fund a power buildout driven by data centers. In Chicago, judges just recommended a third of what Peoples Gas first asked for.
Vincent Jiang · 4 min read
A $66 million answer to a $202 million ask
For more than 898,000 Chicago gas customers, the winter number is $66 million 2. Illinois administrative law judges say Peoples Gas may add that to bills next year, down from the $144 million it sought in July and the $202 million it filed for in January 12. The $144 million ask meant $7 to $8 a month on the average home from 2027; the utility has no projection yet for the judges' figure 2. The Illinois Commerce Commission rules next month 1.
The quarter set a record for asking
The order landed in the sharpest quarter of asking on record. PowerLines, an advocacy group, counted $4.5 billion of electric and gas requests filed in the third quarter, more than double a year earlier, taking 2026 to $23.1 billion 34. Those filings alone could affect the future bills of 45.5 million customers 4.
The largest single case: FirstEnergy's Jersey Central Power & Light+0.33% — FirstEnergy's Jersey Central Power & Light, up 0.33 percent today, with $253 million of base distribution increases plus $476 million of deferred storm costs, an 8.8 percent residential bill rise starting in 2028 3. Electricity prices rose 7.3 percent in the year through April, on top of almost 40 percent since 2021 35.
Rate requests more than doubled in 2025; 2026 is close behind with a quarter left
Data
| Rate increase requests | |
|---|---|
| 2024 | $15B |
| 2025 | $31B |
| 2026 through Q3 | $23.1B |
One corporate family, both ends of the ledger
The money is building the AI era's grid, and one corporate family sits on both ends. Peoples Gas' parent, WEC Energy Group+0.13% — Peoples Gas' parent, WEC Energy Group, up 0.13 percent today, reported a $1.6 billion profit last year 1; its Wisconsin utility, We Energies, filed an engineering plan last week for the 750-megawatt Fox North Energy Center, the state's seventh gas plant proposal in about two years by environmental groups' count 7.
A draft state report puts Wisconsin demand up 40 percent by 2032 on three large data centers, with gas supplying about half the state's power and coal near 3 percent 7. Whether the new plant serves one directly, the utility has not said 7.
Dominion−0.18% — Dominion, down 0.18 percent today says roughly 68 percent of its $7.59 billion in new transmission through 2031 is driven by data center growth 5. The industry plans more than $1.1 trillion of capex through 2029, and PowerLines counts $1.4 trillion through 2030 36. Data centers get the megawatts; ratepayers get the mortgage.
The haircuts are getting deeper
Regulators rarely reject outright, but the discounts are deepening 5. Xcel Energy+0.57% — Xcel Energy, up 0.57 percent today asked Colorado for $356 million and left with $157 million 5. In Minnesota, the commission lifted Xcel's allowed return on equity to 9.6 percent from 9.25, worth $34 million to $35 million a year by advocates' count, with an October 19 deadline on the attorney general's bid to reverse it 8.
Peoples Gas asked for $202 million; the judges said $66 million
- Estimate
Data
| Value | |
|---|---|
| Filed in January | $202M |
| Cut in July | $144M |
| Judges' order (estimate) | $66M |
The same curve runs through the stocks. A utility earns its allowed return on the infrastructure regulators approve, so a deeper haircut leaves less earning base under a capex-driven growth story 8. No source quantifies what an ICC-style cut would do to valuations if it spread nationwide; the exposure sits where growth leans on the biggest pending asks.
Utilities say reliability, voters say affordability
The Edison Electric Institute says every rate request gets rigorous review 3. Peoples Gas quotes the judges' own proposed order in its defense: retiring 1,000 miles of old pipe is "a binding safety mandate," not a discretionary program 12. Both can be true while the politics turns: 74 percent of Wisconsin voters told Marquette pollsters data center costs outweigh the benefits, and energy affordability is on next month's midterm ballot 93.
November prices the template
Watch the size of the cut. Peoples Gas won $303 million as recently as November 2023, so the margin between the judges' $66 million and the final order matters 2.
The pre-emptive alternative is already visible. Xcel's Minnesota arm filed October 9 to freeze base electric rates for 2027 and 2028, funded by accelerated battery-storage tax credits instead of a rate case 10. Oracle+4.24% — Oracle, up 4.24 percent today moved for the same reason, a deep-pocketed customer stepping in front of the bill fight, committing to absorb about $300 million in rising energy costs at the Point Beach nuclear plant through 2033 9.
The AI buildout is real. Its financing is the American utility bill, and the bill has started to vote back.
Deepdive
AI-generated from this story and its cited sources. Not investment advice.
