Key Takeaways
- • Private credit providers are fielding rising inquiries from US investor-owned electric utilities as the sector prepares record capital spending, according to S&P Global sector experts.
- • Combined capex plans for the 20 largest US electric utility holding companies are projected to rise from $190.76 billion in 2026 to $220.11 billion in 2030, per S&P Global Market Intelligence data.
- • Duke Energy and Xcel Energy executives said at a November 2025 conference their companies are in talks with private debt lenders to finance portions of long-term infrastructure programs.
- • NiSource's NIPSCO Generation LLC, approved by regulators in 2025, is cited by CreditSights as a template for ring-fenced utility financing that shields ratepayers.
- • Lenders such as Ares, Macquarie, Nuveen and Blackstone describe growing demand for flexible terms, though private credit costs more than public debt and affordability concerns constrain the market.
Summary
US investor-owned electric utilities are increasingly turning to private credit to finance an unprecedented build-out, according to S&P Global. Private credit providers report rising inquiries from the sector as utilities prepare to spend record amounts of capital. Consulting firm Grid Strategies expects artificial intelligence-driven data center development to fuel annual load growth of 5.7% from 2026 through 2030, after electricity demand was described by the US Energy Information Administration as relatively flat for nearly 20 years. S&P Global Market Intelligence data show combined capex plans for the 20 largest US electric utility holding companies rising from $190.76 billion in 2026 to $220.11 billion in 2030. Jefferies analysts, in a Feb. 18 report, said the ability to raise funds has become a key financial differentiator beyond capex and earnings-per-share growth.
Utilities have traditionally relied on public markets. Executives at Duke Energy and Xcel Energy said at a November 2025 conference that they are in talks with private lenders to finance parts of their long-term programs. Private credit consists of directly originated, non-syndicated loans from nonbank lenders structured as bespoke solutions. Lenders describe utilities as natural counterparties given their high-quality assets. Private credit is more expensive than public debt but offers greater flexibility on duration, interest rates, credit ratings and collateral. Nuveen's Don Dimitrievich said the firm has had discussions with utilities about special purpose vehicles that can be funded as separate entities off the rate base. Blackstone's Zach Rubenstein described private credit as a less permanent alternative to selling noncore assets, which many utilities have already divested in whole or part.
CreditSights' Andy DeVries pointed to NiSource's NIPSCO Generation LLC, which received regulatory approval in 2025, as a model that ring-fences costs so ratepayers are not burdened, with data center customers paying more. DeVries was skeptical that utilities would use private credit for transmission projects, calling long-haul transmission the safest business and questioning paying higher private credit rates there.
Affordability remains a central constraint. Utilities are focused on customer bills as opposition to data centers grows and state regulators scrutinize rising costs. Jefferies Managing Director Paul Zimbardo said in a January interview that the standard has shifted from no customer bill impact to lower bills. DeVries cautioned that regulated ratepayers should not fund the rates private credit charges.
Utilities have traditionally relied on public markets. Executives at Duke Energy and Xcel Energy said at a November 2025 conference that they are in talks with private lenders to finance parts of their long-term programs. Private credit consists of directly originated, non-syndicated loans from nonbank lenders structured as bespoke solutions. Lenders describe utilities as natural counterparties given their high-quality assets. Private credit is more expensive than public debt but offers greater flexibility on duration, interest rates, credit ratings and collateral. Nuveen's Don Dimitrievich said the firm has had discussions with utilities about special purpose vehicles that can be funded as separate entities off the rate base. Blackstone's Zach Rubenstein described private credit as a less permanent alternative to selling noncore assets, which many utilities have already divested in whole or part.
CreditSights' Andy DeVries pointed to NiSource's NIPSCO Generation LLC, which received regulatory approval in 2025, as a model that ring-fences costs so ratepayers are not burdened, with data center customers paying more. DeVries was skeptical that utilities would use private credit for transmission projects, calling long-haul transmission the safest business and questioning paying higher private credit rates there.
Affordability remains a central constraint. Utilities are focused on customer bills as opposition to data centers grows and state regulators scrutinize rising costs. Jefferies Managing Director Paul Zimbardo said in a January interview that the standard has shifted from no customer bill impact to lower bills. DeVries cautioned that regulated ratepayers should not fund the rates private credit charges.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.