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Power Industry Proposal

January 16, 2026


President Trump is again using the “power of the pulpit” to coerce businesses to follow his instructions.  Today, it’s the utility industry.  As I’m sure we all know, electricity prices have been on the rise.  A common refrain is to blame tech companies who are using more power for AI data centers. 


As such, the administration is forming a plan to “force” tech companies to bid on new 15-year energy contracts.  Effectively, the tech companies will promise to pay for energy from these new contracts for 15-years.  This guaranteed stream of revenue will backstop the construction of $15 billion worth of new power plants.   Who exactly will build and operate these plants remains to be answered.


For the average person, this wont really mean much.  The size of the US electrical grid is massive.  And $15 billion in new plants would add less than 1% to the total output.  However, if it’s concentrated all in a specific region (like the northeast), it could be more impactful (maybe 5%).


For the tech companies, this is music to their ears, as they are desperate to get newer (and cheaper) sources of power for their growing needs.  I’m talking about the big data center builders (AMZN, MSFT, GOOGL, META, ORCL, etc).


Who are the losers here?  Well, the existing power operators.  Constellation Energy (CEG) and Vistra (VIST) are two large power providers who have migrated into “AI infrastructure” plays.  They have significant pricing power over the tech cos.  This announcement obviously means less pricing power for them.  So those stocks are falling.


For the winners, one of the clearest would be GE Vernova (GEV), who manufacturers electric power systems into the grid.  Growth in the electric grid is a nice secular tailwind of growth for them.

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