Data centers expected to use 4x more electricity by 2035

The clean read-through is that power scarcity is shifting value from tech demand to grid owners, but not evenly. Merchant generators and load-serving utilities with fast interconnection and flexible fuel mixes should capture the first wave of incremental pricing, while regulated utilities stuck in congested territories face a worse timing mismatch: they need to spend now, but monetization depends on slow rate-case and tariff approvals.

AEP sits in the awkward middle. In the next few quarters, the stock is more exposed to interconnection friction, capex intensity, and regulatory lag than to the upside from new load, because capacity growth does not automatically convert into earnings if the queue is clogged or the commission pushes back on cost recovery. The contrarian point is that the market may be underestimating how much special data-center tariffs can reprice the utility model over 6-18 months; if AEP secures dedicated contracts or accelerated depreciation, the current bearish read could reverse quickly.

The bigger second-order effect is on power-market spreads: sustained load growth should tighten capacity and transmission in PJM/ERCOT, which is a tailwind for merchant power and gas supply chains, but it also raises political risk. If retail bills keep inflating, expect demand-response, moratoria, or accelerated interconnection reform, which would cap the tradeable upside and force a rerating from 'scarcity premium' back to 'regulatory overhang.'