Load growth is no longer an abstract number in an electricity market report or forecast; it’s a reality. According to the U.S. Energy Information Administration (EIA), U.S. electricity load will increase nearly 2 percent in 2026 and 2.5 percent next year, driven by large loads like data centers and manufacturing as well as increased electrification of transportation and building heating and cooling. To put that number in perspective, annual load growth between 2005 and 2019 was about 0.1 percent, meaning the next two years will see nearly 50 times the growth that the industry experienced in the last 15 years.
Rapid load growth changes nearly everything for utilities, from how they plan and invest to how they engage and communicate with customers. Load growth is also compelling many utilities to do something they haven't done at this scale and pace before: develop their own generation. “Utilities are used to designing and building a gas plant once every five or 10 years, and then they would contract via PPAs (power purchase agreement) everything else,” said Alex Pope, Manager of Power Development Portfolios 1898 & Co. “But the systems utilities have in place to self-develop generation projects were never built to handle the volume necessary to meet the demand and timelines of today’s customer needs.”
Building from scratch is hard
As PPAs and BTAs (Build-Transfer Agreement) alone become insufficient to close the generation and load gap, many utilities that recognize the need to build more projects themselves face an important question: how do we start? One avenue is to focus inward and develop the internal expertise and resources needed to move projects from concept to commercialization—everything from land acquisition and permitting to financing, regulatory approvals, procurement strategies, and construction.
While this approach gives utilities complete control over the development of new generation, it also has meaningful challenges. One significant hurdle is the need to either augment the teams responsible for each phase of a successful new project or completely build from scratch. “You may have to quadruple your internal team of environmental specialists because you need to be pushing multiple projects forward,” Pope said. “The challenge is that everyone is trying to hire for these project-related roles and competition is stiff.”
Beyond adding personnel, what utilities also find is that the underlying internal processes and coordination needed to efficiently develop a large pipeline of generation projects simply don’t exist. Creating that necessary foundation involves hard choices about responsibilities and collaboration that inevitably take time that utilities don’t have if they are to meet this historic moment of load growth.
A partnership approach
There’s another option, one that leverages existing utility expertise without requiring a vast expansion of staff. That option is to bring in a partner like 1898 & Co. to work alongside utility staff, increase their impact across projects, provide industry lessons and best practices from other utility peers, and act as the connective tissue between departments that need to collaborate for generation projects to move forward efficiently.
The rationale for the partnership is simple: utilities already have exceptionally capable people to handle environmental review, land rights, interconnection, regulatory approvals, and other aspects of project development. What utilities often lack, however, is a foundational infrastructure to ensure their internal teams work together rather than at cross-purposes across a large portfolio of projects in simultaneous development. This is necessary when utilities are trying to expand their self-development capacity from one or two projects per decade to a large and growing portfolio. “Their groups are industry best at what they do,” said Pope, who works directly with major utilities across the country to bolster the utility’s self-development capabilities. “But what they did was suited for one thermal project every five years. It was never set up to handle the throughput of what they’re being asked to do right now.”
The value of a single source of truth
1898 & Co.’s partnership approach is intentionally flexible, designed to supplement a utility’s existing self-development capacity and expand it to align with its goals and strategies. For example, Pope says some utilities start with development transfers, in which a third-party developer brings a shovel-ready project, and the utility completes due diligence before moving forward. This offers a lower-risk way to better understand the demands of self-development before attempting a larger portfolio of self-originated projects.
Other utilities have embraced full self-development, choosing to outsource only the capital-intensive step of land acquisition while keeping the rest of project management in-house. Utilities like Xcel Energy and DTE Energy, with support from 1898 & Co, leverage a blend development-transfer, self-development, PPA, and BTA structures to avoid putting all their eggs in one basket. No matter what model a utility chooses, Pope says 1898 & Co. provides a “single source of truth” across a portfolio of projects. This is possible because 1898 & Co. screens potential sites, manages due diligence, helps steer overall strategy, tracks deliverables, and coordinates across environmental, permitting, interconnection, and land rights teams. That combination of coordination and analysis ensures that a utility’s internal specialists, consulting partners, and selected EPC firms can all work together as one cohesive self-development team.
Real-world results
The financial rationale for pursuing a partnership that enhances a utility’s self-development is also compelling. 1898 & Co.’s services not only help investor-owned utilities keep up with the demands of their customers but also create strong shareholder value in the process.
Ultimately, though, what matters is whether a partnership approach allows utilities to function as high-volume generation project developers. In a recent all-source request for proposals (ASRFP), 1898 & Co. supported over 60 gigawatts of generation projects for its utility clients. Of those, 22 gigawatts were then bid in competitive RFPs. The result: 10 gigawatts won.
