American gas and electric utility holding company Southern Company has increased its capital investment plan by 30%, bringing the total to $63bn through to 2030.
The decision is primarily driven by growing electricity demand from artificial intelligence data centres and population growth in the US South, as reported by Reuters.
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Transmission projects form the largest portion of Southern Company’s proposed spending increase.
The company serves nine million customers across Alabama, Georgia, Illinois, Mississippi, Tennessee and Virginia.
Southern Company’s pipeline of data centre customers and other large electricity users exceeds 50GW, with subsidiary Georgia Power accounting for 40GW of this demand.
10GW of the company’s pipeline are from committed projects.
The expansion of technologies such as generative AI, which require large data centres, contributed to record-high US power demand in 2024.
Despite this rising demand, Southern Company narrowly missed Wall Street expectations for fourth-quarter profit due to higher US interest rates.
Southern Company’s interest costs for the October to December quarter increased to $693m compared to $634m in the previous year.
Total operating expenses increased by 9% to $5.28bn, with operating and maintenance costs rising to $1.99bn – an increase of 14.6%.
US utility CenterPoint Energy has also increased its 10-year capital expenditure plan by $500m to strengthen its electricity grid for the surging demand from new data centres.
According to a study by Lawrence Berkeley National Laboratory, power demand from US data centres is expected to almost triple by 2027, consuming up to 12% of the total electricity produced.
CenterPoint expects a 50% rise in demand by 2031 within the Houston electric service area and has increased its capital plan through to 2030 up to $47.5bn to improve grid resilience.
CenterPoint chief financial officer Christopher Foster stated: “Like our peers, we have experienced an unprecedented level of interest in connecting to our grid…we have received approximately 40GW in load interconnection requests.”
Utilities including Dominion Energy, Duke Energy and DTE Energy have also raised their capital expenditure plans to meet the rising power demand from data centres.
