Full Breakdown
Early Cost Recovery via CWIP Expands Across U.S. Power Grid
5/11/2026, 6:26:52 AM
Grid Modernization Push and CWIP Expansion
Policymakers are accelerating upgrades to the U.S. electric grid as AI-driven data centers increase demand. To finance new plants, transmission lines and offshore wind farms, many states have adopted Construction Work In Progress (CWIP) mechanisms that let utilities recover financing costs from customers before projects are finished. At least 40 states now have CWIP provisions, roughly twice the number a decade ago. The charge typically adds a few dollars per month to an average bill; for example, Nevada’s NV Energy levies about $4 per month for a high-voltage line slated for 2028, while Virginia customers see an $11.23 monthly surcharge for an offshore wind farm still under construction. Over the past five years, U.S. electricity prices have risen about 40 %.
Key Actors and Official Positions
Missouri Governor Mike Kehoe reinstated CWIP after a 50-year ban, saying it incentivizes new generation and spreads financing costs to avoid sharp bill spikes. The National Governors Association declines to take a position on CWIP’s appropriateness for states. Utilities argue CWIP lowers borrowing costs versus market financing and can yield modest long-term savings; Dominion Energy projects a $2 billion saving over the 30-year life of its Virginia offshore wind farm, and NV Energy cites the $4-per-month charge as needed for future transmission.
Consumer Concerns and Opposition
Consumer groups argue that CWIP shifts financial risk to ratepayers, many of whom are unaware of the charges. They point to a growing affordability crisis as electricity rates climb sharply. Analysts note that CWIP can shield utilities from cost overruns and delays, leaving customers to absorb overruns, especially for high-risk projects such as nuclear reactors.
Conflicting Analyses, Gaps, and Outlook
Utilities claim CWIP will generate net savings, yet analysts estimate the benefit could be as low as 0.1 % of rates and require a ratepayer to stay on the system for 52 years to see any gain. No comprehensive data exist on how many CWIP-financed projects will ultimately deliver the promised savings, leaving long-term consumer impact uncertain. State regulators are reviewing CWIP rules amid growing voter backlash, and new offshore wind and transmission projects are expected to rely on CWIP financing in the coming years.
Verbatim Quotes
- “All this does is shift the financial risk to the ratepayer,” — Paul Cicio, President, Industrial Energy Consumers of America
- “Huge rate increases have caused a monumental affordability crisis for electricity,” — Ben Inskeep, Program Director, Citizens Action Coalition of Indiana
- “A ratepayer would need to stay on the system for 52 years before receiving any net benefit from the CWIP model,” — Mark Garrett, Consultant, Nevada’s Bureau of Consumer Protection
- “If a project, particularly a nuclear one, cannot attract private capital without a public backstop, it is a clear signal that it may not be a financially responsible investment,” — Jason Walter, Professor of Economics, University of Tulsa
