BOSTON, Massachusetts: The massive investment needed to modernize America's aging power grid is creating a potential windfall for utility executives, even as consumers face rising electricity bills and growing concerns about affordability.

According to a Reuters analysis of regulatory filings, the chief executives of the 15 largest U.S. power companies collectively hold nearly US$1 billion in stock-based compensation that could increase further as utilities ramp up spending on grid upgrades.

The opportunity stems from a unique feature of the regulated utility business model. Utilities are generally allowed to earn returns on infrastructure investments approved by regulators, meaning larger capital spending programs can translate into higher earnings and company valuations.

"Earnings and cash flows increase when the utility invests capital, and the regulator allows an agreed rate of return," Fidelity's $4 billion Select Utilities Portfolio said in a recent update for investors.

Industry analysts estimate that spending to upgrade and expand the U.S. electrical grid could exceed $1 trillion over the next decade.

The push for investment comes as electricity demand rises sharply, driven in part by the rapid expansion of artificial intelligence and the growing number of data centers required to support it.

The S&P 500 Utilities Index has risen more than 30 percent since the beginning of 2024, reflecting investor optimism about the sector's growth prospects.

At the same time, electricity costs have climbed. Government data shows average monthly power bills are up 10 percent nationwide this year.

Consumer advocates argue that the industry's compensation structure creates a disconnect between rising customer costs and executive rewards.

"America's energy affordability crisis is made worse by the misalignment of utility profits and customers' high energy burdens," said Tyson Slocum, director of the energy program for Public Citizen.

"Hardworking families are picking up the bill while utility CEOs and their investors are making guaranteed profits," he said.

It was found that executives at the largest utilities hold an average of roughly $66 million each in unrealized stock-based compensation.

Vistra CEO James Burke leads the group with more than $100 million in unrealized stock awards, followed by executives at Constellation, NextEra Energy, and Entergy.

At Talen Energy, CEO Mark McFarland became eligible to access nearly 900,000 vested restricted shares last month. Based on current market values, those shares could be worth about $300 million if sold, according to company disclosures.

Utilities are also positioning themselves to benefit from growing electricity demand. NextEra Energy recently agreed to acquire Dominion Energy in a $67 billion transaction that would create the nation's third-largest energy company.

Dominion serves northern Virginia, home to the world's largest concentration of data centers.

Some utilities have defended their compensation practices, arguing executive incentives are linked to performance and service reliability.

"The vast majority of our CEO's pay is not recovered from customers, and the portion that is tied to performance reinforces reliable service and cost control," an Exelon spokesperson told Reuters.

The debate comes as more Americans struggle with utility costs. According to a report released in April by the Energy Information Administration, approximately 13.4 million residential electricity customers experienced service disconnections in 2024 because of unpaid bills.

"Keeping the lights on for everyday Americans should be part of the compensation calculation for CEOs who have the power to tackle this problem, not just skyrocketing returns for investors," said Logan Burke, executive director of the Alliance for Affordable Energy.