Electric Transmission Shifts Toward Regional Grid Investment
Summary
CenterPoint, AEP and FirstEnergy say large loads used up spare transmission capacity, so new spending targets regional grid work as suppliers book into 2027-2029.
US utilities say the spare transmission capacity that served the first wave of large power users is gone. On their third-quarter earnings calls on October 27-28, 2026, CenterPoint Energy (CNP), American Electric Power (AEP) and FirstEnergy (FE), along with specialty-equipment rental company Custom Truck One Source (CTOS) and electrical component maker Hubbell (HUBB), described new transmission spending and equipment orders moving toward regional grid work that is not tied to any single customer and is scheduled for 2027 and beyond [1][2][3][4][5].
Why exhausted transmission headroom changes what utilities build
The transmission grid carries power from generating plants to regions. When a large load such as a data center connects, the cheapest option is to use capacity the existing lines are not yet carrying, known as headroom. In February 2026, CenterPoint estimated it had "a little shy of 10 gigs of existing capacity" [6]. By October, it said serving that growth was absorbing the capacity that had attracted it [1]. Once headroom is used up, connecting the next customer requires reinforcing the network as a whole. CenterPoint's study covers three kinds of projects: import transmission capacity, system stability and intra-regional transmission capacity [1]. These projects are sized to a region's needs rather than to one customer contract, and utilities recover the investment through regulated rates. Any utility whose region keeps adding load faces the same pressure, and that pressure passes down to equipment makers, rental fleets and line contractors.
Capital plans and order books now stretch past 2027
The utilities' capital plans show that most new transmission spending is not attached to individual customers. CenterPoint's new projects total about $5.5 billion: $4 billion of newly identified projects outside its previous 10-year plan and $1.5 billion pulled forward from the back half of the plan into the years through 2030 [1]. The company said this covers only about half of the capacity it expects to need for its first batch of large loads and that it will update the study in the first half of next year [1]. AEP raised its transmission plan to $37 billion through 2031, of which $17 billion comes from regional transmission organization planning, $11 billion is for reliability and only $9 billion serves individual customers; it expects transmission rate base to nearly double over five years to approach $70 billion [2]. FirstEnergy expects at least a 25% increase to its $19 billion transmission plan, and its CFO said most of the increase is reliability work on the existing system, with "very little" associated with contracted demand [3].
Suppliers are seeing booking horizons lengthen. Custom Truck One Source said customers are now discussing projects that start in 2027 and even 2028, whereas it used to hear about projects weeks or months in advance [4]. It expects some customers to keep equipment over the holidays instead of returning it as usual, because the gear may not be available afterward, and it raised its 2026 net rental fleet investment to $210 million to $230 million [4]. Hubbell has built more than $500 million of backlog this year, led by transmission and substation projects, and said it will have to keep adding capacity in 2027 for 2028 and in 2028 for 2029 [5]. In April 2026 Hubbell had said it was not seeing significant supply-chain constraints [7], so the tightness has emerged within the last two quarters.
Grid equipment and construction capacity become forward-booked
When regional planning rather than single contracts drives transmission demand, suppliers face multi-year utility programs approved by regulators instead of one-off orders. That can tie up capacity for structures, hardware, rental trucks and line crews years in advance and give suppliers more say over pricing and delivery timing. Headroom is not exhausted everywhere, however. NiSource (NI) still pitches transmission access as a reason customers choose its territory, and its transmission work includes a delivery substation built for Amazon [8]. Demand risk also remains: Wood Mackenzie estimates that only 23% of data-center power requests are high confidence [9]. The utilities argue that network investment does not depend on any single project, but that claim has not yet been tested by a wave of cancellations. Signals to track include CenterPoint's updated transmission study in the first half of 2027, FirstEnergy's new five-year plan and whether transmission rental gear comes back after the holidays.
Companies exposed to the transmission build-out
- Valmont Industries (VMI): Makes steel and concrete structures for transmission lines and substations; its North America utility sales grew 34% in the second quarter of 2026, and management said growth was limited by its own capacity [10]. Utility network programs could translate into its orders and expansion needs.
- MYR Group (MYRG): Builds transmission and distribution lines and substations, with a $1.27 billion T&D backlog that includes projects budgeted to build in 2028-2030 [11]. It is also the kind of customer that rents heavy equipment and buys transmission hardware.
- AZZ (AZZ): Hot-dip galvanizes the steel structures utilities order; it reported that one utility-structure customer's backlog growth accelerated from about 35% to 44% [12], placing it one step behind structure makers in the chain.
Sources
[1] Drillr · CenterPoint Energy · 2026-10-27 · Earnings call
Serving this growth absorbs the capacity that helped attract it.
[2] Drillr · American Electric Power · 2026-10-28 · Earnings call
[3] Drillr · FirstEnergy · 2026-10-28 · Earnings call
[4] Drillr · Custom Truck One Source · 2026-10-27 · Earnings call
[5] Drillr · Hubbell · 2026-10-27 · Earnings call
[6] Drillr · CenterPoint Energy · 2026-02-19 · Earnings call
[7] Drillr · Hubbell · 2026-04-30 · Earnings call
[8] Drillr · NiSource · 2026-10-28 · Earnings call
[9] NPR/WXXI · Wood Mackenzie estimate of data-center power requests · 2026-10-23 · News report · https://www.wxxinews.org/npr-news/2026-10-23/why-meta-is-charging-to-post-more-hyperlinks
[10] Drillr · Valmont Industries · 2026-07-21 · Earnings call
[11] Drillr · MYR Group · 2026-07-30 · Earnings call
[12] Drillr · AZZ · 2026-10-14 · Earnings call
This article highlights industry changes and companies that may be overlooked. It is not a stock recommendation.