America's investor-owned electric companies are preparing to launch one of the largest infrastructure modernization efforts in U.S. history, committing more than $1.1 trillion over the next five years to strengthen and expand the nation's power grid, according to new research from the Edison Electric Institute (EEI).

The EEI's Industry Capital Expenditures--2025 Projections, released Oct. 7, highlight an accelerated investment pace compared to the $1.3 trillion deployed by the industry over the previous decade. The report cites rising energy use from data centers, artificial intelligence, manufacturing, and economy-wide electrification as key drivers.

EEI estimates member companies will invest $208 billion in 2025, funding construction of "more energy- and cost-efficient infrastructure" to enhance reliability and lower customer costs. U.S. electricity generation climbed 3% in 2024 to reach 4,304,038 GWh, the largest annual increase in five years. EEI projects generation will exceed 4.5 million GWh by 2030 and 5.4 million GWh by 2040.

The report indicates a shift in capital allocation back toward generation, which has risen from 24% to 30% of total spending since 2020. Currently, 91 GW of capacity is under construction, with another 488 GW planned or proposed within five years--representing nearly half of current U.S. grid capacity.

According to EEI, spreading investment costs across a growing energy base will help drive down long-term costs while ensuring the continued delivery of safe, reliable, and affordable electricity to nearly 250 million Americans.

Even as generation investment expands, distribution infrastructure remains the largest spending category, reflecting the need for comprehensive grid upgrades to accommodate higher power flows and evolving generation patterns.

Source: Edison Electric Institute (EEI)