America’s utility sector is sitting on a $25 billion problem, and artificial intelligence is a major reason why it keeps getting worse.
In 2022, the U.S. utility industry was carrying roughly $15 billion in unpaid customer bills it was actively trying to collect from struggling households.
By 2025, that figure had climbed to $25 billion, and the number of customers having their electricity shut off is rising alongside it.
The surge in AI data center construction is driving unprecedented electricity demand, pushing up rates and squeezing households already living on tight budgets.
Virginia, one of the world’s most important data center markets, illustrates the problem sharply, with electricity prices near data centers rising by over 260% over a five-year period, according to Bloomberg.
NextEra Energy (NYSE: NEE), one of the world’s largest utilities, has agreed to acquire Dominion Energy (NYSE: D), which operates in Virginia and has leaned heavily into AI demand as a growth catalyst.
The deal is expected to boost NextEra’s earnings growth, but only if regulators approve the rate increases that increased AI-driven capital spending will require from customers.
NextEra’s regulated utility arm currently maintains relatively low electricity rates and enjoys solid relationships with its regulators, giving the combined company a reasonably stable outlook.
Meanwhile, Dividend King utility Black Hills (NYSE: BKH), which carries an over 50-year streak of annual dividend increases, is planning to merge with NorthWestern Energy (NASDAQ: NWE) to nearly double its size.
Scale is becoming an increasingly critical factor for utilities trying to raise capital for infrastructure investment while navigating tough conversations with rate regulators.
Companies operating outside the traditional regulated utility framework may actually be better positioned to capture AI-driven power demand without the same regulatory friction.
Constellation Energy (NYSE: CEG), which sells power at market prices under long-term contracts from its fleet of nuclear and gas plants, already holds major deals with Meta (NASDAQ: META) and Walmart (NYSE: WMT).
Brookfield Renewable (NYSE: BEP)(NYSE: BEPC) offers another avenue, spanning solar, wind, hydroelectric, storage, and nuclear power across North America, South America, Europe, and Asia, with partnership units yielding up to 4.7%.
Bloom Energy (NYSE: BE), which manufactures hydrogen fuel cells that allow AI data centers to operate independently of the electric grid, entered 2026 with a $6 billion product backlog, 2.5 times higher than a year earlier.
The company’s total backlog stands at $20 billion when service contracts attached to each fuel cell sale are included, pointing to years of potential growth ahead.
Bloom Energy shares surged more than 800% over the past year as Wall Street priced in the opportunity, though the stock has since entered a pullback that growth-focused investors may want to monitor.
Regulated utilities are not necessarily poor investments, but shareholders need to clearly understand the balancing act between AI-fueled growth and the political risk of rising consumer electricity bills.
NextEra Energy straddles both worlds through its unregulated solar and wind power business, while Constellation Energy, Brookfield Renewable, and Bloom Energy operate entirely outside the regulated utility structure.
