US utility PSEG increases spending plan as pipeline for data centers jumps
Public Service Enterprise Group, a U.S. Northeast gas and electric utility, raised its capital plan on Tuesday as interest in large power loads such as AI data centers increased.
In the United States, power companies are increasing their spending plans in order to boost the grid and build new electricity sources in response to the record-breaking demand for electricity this year. Meanwhile, Big Tech is investing billions of dollars in developing artificial intelligence technology and infrastructure to support it.
PSEG expects to spend between $22,5 billion and $26 billion in the five years from 2025 to 2029. This is an increase of $3 billion compared to its previous plan.
PSEG executives stated on the company's earnings call that PSEG's pipeline for potential large-scale power customers in New Jersey, which includes data centers, has increased to 4,700 Megawatts (MW), up from 400 MW at the beginning of 2024.
The updated capex will keep the long-term compound annual growth rate of adjusted earnings at 5% to 7 % through 2029.
PSEG claims multiple nuclear power plants on Artificial Island, New Jersey. Company executives have said that they are looking into possible agreements to sell electricity to data centers from these plants.
Nuclear power plants
Data center developers are increasingly looking for power sources that provide around-the clock electricity with virtually no carbon emissions.
PSEG's current-year adjusted profits are expected to range between $3.94 and $4.06% per share. This is about 9% more than 2024 earnings.
About 4.3 million New Jersey residents receive electric and gas service from the company. The company also manages nuclear-generating assets via its PSEG Power division.
According to data compiled and analyzed by LSEG, the Newark, New Jersey based company reported an adjusted profit per share of 84 cents for the three-month period ended December 31. This compares with analysts' estimates of 83 cents.
The company's shares were down by 2.6% at midday. Reporting by Laila K. Kearney, New York; Vallari Srivastava, Bengaluru. Editing by Shilpa Majumdar and Marguerita C. Choy.
(source: Reuters)
