AI and Data Centers Reshape Utility Priorities

MCLEAN, VA — June 3, 2025 —The U.S. power industry is poised for a transformative year ahead, as rising energy demand from AI and data centers, coupled with new energy policies at the federal level, create a complex and evolving operating environment. That’s according to the 2025 edition of State and Future of the Power Industry, a survey and report that’s published jointly by Guidehouse and Public Utilities Fortnightly and gathers insights from more than 300 utility executives and energy sector leaders.

Now in its 10^th year, the survey reveals a utility sector that is increasingly bullish and proactive, doubling down on core priorities like reliability and resilience in the face of intensifying demand from AI and data centers. After years of flat or declining loads, utilities are now planning for sustained growth—prompting a renewed emphasis on domestic baseload resources such as natural gas and nuclear. 

“The insights from this year’s survey show an industry navigating a pivotal moment,” said Michelle Fay, Partner and Global Energy Providers Lead at Guidehouse. “The surge in AI-driven energy demands and data center loads has highlighted the urgency for utilities to prioritize resilient, flexible infrastructure. By fostering collaboration with public stakeholders and regulators, utilities can proactively tackle these challenges to ensure a stable and reliable energy future for all.”

Key findings from the State and Future of the Power Industry report include:

• 95% of respondents identified either the new administration’s evolving policy direction or surging load growth as the most disruptive force facing the sector this year.
• 61% said their systems can absorb some increased load, but reliability concerns will limit gains, while more than a quarter of respondents believe grid infrastructure is not ready for the projected demand.
• The top-cited longer-term threats are aging infrastructure (40%), climate-related events (35%), and energy inequity and affordability (25%).
• When asked about priorities for future infrastructure investment, 62% pointed to storm-hardened, self-healing, resilient grids—up from 57% in 2024.

Despite the pressures, long-term energy goals remain intact, according to the report. Many respondents cited state mandates, regulatory pathways, and strong public support as stabilizing forces, suggesting that progress will continue even if federal incentives shift.

“There’s growing urgency around infrastructure modernization and expansion, but utilities are wisely avoiding overcommitment to short-term trends,” said Ted Walker, a Partner with the energy providers practice at Guidehouse. “They are prioritizing the development of resilient and flexible systems that can adapt to the evolving demands of their customers, ensuring stability and reliability—no matter how the future unfolds.”