How USA consumers are paying for utility projects decades in advance

In an urgent scramble to modernise an ageing electric grid under the immense strain of artificial intelligence data centres and rising national demand, millions of American households and businesses are quietly acting as the primary financiers for power projects they may not benefit from for decades. Through a controversial policy mechanism known as 'Construction Work In Progress' (CWIP), utility companies are increasingly permitted to pass the capital costs of unbuilt power plants and transmission lines directly onto consumer bills, fundamentally altering the traditional risk model of American infrastructure development.

This shift in financing marks a stark departure from the historical norm, where utilities were required to secure private capital from banks and Wall Street, only recuperating their investments from ratepayers once a project became fully operational and began delivering power. A comprehensive review of regulatory filings across the United States reveals a rapid acceleration in the adoption of CWIP policies. Over the last decade, the number of states authorising these advance charges has doubled. Today, at least 40 states permit some form of CWIP, driven largely by the sudden, aggressive power demands of the technology sector and a domestic reserve buffer that regulators warn is perilously thin.

The financial logic presented by state governments and utility providers centres on long-term cost reduction. By generating immediate cash flow through small monthly surcharges—typically amounting to several dollars per household—utilities reduce their reliance on high-interest commercial borrowing. Proponents, including the administration of Missouri Governor Mike Kehoe, argue this approach prevents the dramatic “rate shock” that traditionally occurs when a massive new facility comes online, spreading the cost over a longer, more manageable timeline. In states like Virginia, the nexus of the global data centre industry, consumers are already paying a peak monthly charge of over $11 to fund Dominion Energy’s $11.5 billion offshore wind farm, a project still under construction. Dominion executives maintain this early funding structure will ultimately save ratepayers $2 billion over the 30-year lifespan of the farm.

However, this systemic shift places the financial burden—and the inherent risk of large-scale infrastructure failure—squarely onto the shoulders of the public. Consumer advocacy groups and industrial trade bodies argue that ratepayers are unknowingly subsidising a trillion-dollar utility investment super-cycle, one that guarantees utilities a regulated return on capital spending ranging from 9 to 12 per cent, regardless of a project’s success. The timeline for consumer benefit is also heavily scrutinised. In Nevada, where NV Energy is applying CWIP to fund high-voltage transmission lines slated for 2028, independent analysis suggests a ratepayer might need to remain on the system for over half a century before realising any net financial benefit. This means a middle-aged consumer today might not see the promised savings within their lifetime.

The potential hazards of shifting construction risk to the public are perhaps best illustrated by the Vogtle nuclear reactor project in Georgia. Shielded by provisions that allowed costs to be passed to consumers despite severe delays, the project ran seven years behind schedule and cost $35 billion, more than double its initial estimate. Georgian households absorbed roughly $1,000 each in CWIP expenses over the course of the build, sparking a fierce political backlash that resulted in the unseating of two public service commissioners late last year. As the United States braces for electricity demand to grow at a rate not seen in over a generation, the reliance on CWIP policies highlights a critical tension in national energy policy: the desperate need to build a resilient, future-proof grid versus the ethical and economic implications of forcing today’s consumers to act as the involuntary bank for tomorrow’s infrastructure.