Utilities across the United States spent an estimated $320 billion on electricity in 2023, a 12 percent increase from $287 billion in 2003 (in real 2023 dollars), according to data compiled by the U.S. Energy Information Administration (EIA) in November 2024. This two-decade rise has been largely driven by capital investments in grid infrastructure—replacing aging equipment, adding new natural gas-fired plants, and, more recently, integrating wind, solar, and battery storage to boost reliability.
A closer look at the EIA numbers reveals that utilities have sharply increased their distribution system spending, which soared by 160 percent since 2003. Much of this growth has come in the last year, with an extra $6.5 billion poured into everything from new poles and underground lines to advanced substation equipment (see Figure 1). These upgrades do more than reduce power outages: they also support the expanding footprint of renewable energy and create room for the growing number of electric devices and vehicles plugging into the grid every day.
Figure 1: Annual U.S. Capital Additions by Sector (2003-2023, billions of 2023 U.S. dollars)
Source: Energy Information Administration (EIA)
Where does building electrification fit into all this? As distribution and transmission infrastructure becomes more resilient, both residential and commercial customers stand to benefit from better grid performance—fewer outages, more precise voltage control, and an easier path to install electric heating, cooling, and cooking appliances. In many regions, utilities are installing smart meters, automated controls, and even rooftop solar equipment on or near customer properties. According to EIA, these on-site investments reached $5.1 billion in 2023, an 84 percent increase from 2003 levels. Such technology can help building owners manage energy loads intelligently, taking advantage of time-of-use rates or integrating solar energy and battery storage.
Energy storage, although still a fraction of total spending, grew from $97 million in 2022 to $723 million in 2023. Batteries on the distribution grid and smaller localized systems both help ease the intermittency of renewables, maintain power quality, and serve as backup for newly electrified loads. These improvements are critical for homes and businesses switching over to electric space heating, water heating, and vehicle charging—all of which depend on a stable, responsive grid. As we noted in a previous Data Story on the IRA’s two-year anniversary, $88.1 billion in federal support for building decarbonization offers expanded resources for even more advanced storage, heat pumps, and other electrification strategies that will further strengthen resilience and cut carbon emissions, not to mention the other billions encapsulated in IIJA and other federal programs.
Yet each filing must pass regulatory muster—utilities need approval for how they recover costs, and customers often weigh in to make sure EV-related spending doesn’t lead to unfair rate hikes.
While the bulk of utility spending reflects legitimate system improvements, recent watchdog reports indicate that not every expenditure directly benefits the public. Instances of questionable uses of ratepayer money—such as paying for luxurious corporate perks or certain lobbying efforts—underscore why robust oversight is so critical. Public Utility Commissions (PUCs) exist, in part, to protect consumers from unjustified rate increases, and many states are strengthening their processes for scrutinizing proposed capital spending. In fact, some states have introduced legislation prohibiting the use of ratepayer funds for political or PR-related expenses, and others have been using their independent consumer advocacy offices to challenge frivolous filings.
Engaged ratepayers help ensure that commissions place community needs at the center of their decisions. Attending open meetings, submitting public comments, or even browsing open dockets online can make a difference—particularly when big investments, such as large-scale storage or new substation projects, could dramatically affect electric bills. The Buildings Hub platform (and EV Hub for transportation electrification) highlights additional resources and dashboards to demystify these processes and highlight how funds are allocated.
Looking ahead, new federal and state decarbonization incentives will likely shape utility spending well into the future. As cleaner energy mandates expand and more buildings transition to all-electric systems, the interplay between reliable infrastructure, smart management tools, and community oversight will grow even more important. By staying informed about utility spending and pushing for transparent, equitable resource allocation, we can collectively steer this record investment in a direction that truly supports reliability, affordability, and building decarbonization. Let’s keep the momentum going.
