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CONTRIBUTORS

Anujeet Sareen, CFA

Portfolio Manager
United States

Flat Growth Has Led to Flat-Footedness: With electricity consumption flat for almost two decades, US load growth was stagnant from 2000 to 2020. In 2025, the public and private sectors have been scrambling to build out infrastructure and rein in retail prices as data center buildouts and electrification continue to drive consumption.

More Pain for Households: The Mid-Atlantic region serves as a proxy for residential electricity prices. Its June 2025 capacity auction prices continued to hit all time highs; 45% of total power costs were attributed to data centers, or $7.3 billions. With no relief in sight, retail electricity prices are expected to continue rising into at least 2026.

Projected Transmissions Expansion: Transmission is an underappreciated facet of the grid and has been underinvested in for almost 20 years. Projected expansion through 2040—even in high load parts of the grid—may not be enough to withstand projected demand which should double by 2035.

Producer Prices Are Also Rising: Copper is a key input in transmission and distribution lines; supply chain issues—including imports—and rising costs will likely be a headwind to producer and retail prices.

Co-location Has Yet to Take Off: Co-locating power capacity and production at data centers has been floated as a popular solution, but only accounts for 7% of US facilities. With a 4+ year backlog in gas turbines, co-located renewable power remains an alternative, though battery storage remains an outstanding problem.

Look to Texas for Innovation: Comparing Pennsylvania, New Jersey, and Maryland (PJM) and the Electric Reliability Council of Texas (ERCOT), Texas is poised to be a potential winner of managing retail prices and renewable energy growth and innovation. The Texas grid has stabilized power prices during seasonal peak loads; it is also increasingly supported by solar and battery storage, and both are projected to grow through 2030.

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WF: 8857811

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