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The stocks of power-plant owners have rocketed higher this year as dramatically as Nvidia —and even more so, in some cases. Shares of Constellation Energy

have doubled, while Vistra and Talen Energy have tripled. Artificial-intelligence computer programs demand extraordinary amounts of electricity, and tech companies are willing to pay up to secure it.

The stocks of power-plant owners have rocketed higher this year as dramatically as Nvidia—and even more so, in some cases. Shares of Constellation Energy

have doubled, while Vistra and Talen Energy have tripled. Artificial-intelligence computer programs demand extraordinary amounts of electricity, and tech companies are willing to pay up to secure it.

There may be limits to those gains, however—even in a Trump administration.

The bullish case for power stocks was premised, at least in part, on tech companies signing lucrative agreements to plug their data centers directly into power plants. The data centers would get dedicated electricity, and the power companies would get guaranteed payments at above-market rates. But on Nov. 1, federal regulators rejected the first of those deals, which Amazon.com had signed with Talen to plug a data center into a Pennsylvania nuclear reactor that Talen owns. (Nuclear power has been in particularly high demand because it’s considered reliable and clean.) In reaction, Talen and Vistra stocks fell 2% and 3%, respectively, and Constellation—the largest owner of nuclear plants in the country—fell 12%.

The ruling came from the Federal Energy Regulatory Commission, or FERC, which oversees the nation’s electricity grids. Nearby utilities had argued that Amazon was trying to siphon power away from the grid without helping to pay for the transmission network that keeps electricity flowing to regular consumers. One FERC commissioner wrote that Amazon’s plan “could have huge ramifications for both grid reliability and consumer costs.” Talen said FERC’s ruling was wrong and would stunt economic development. Amazon declined to comment.

The FERC decision is a sign that there’s a limit to how much power companies can benefit from special data-center deals.

Power and tech stocks have been rising together this year because of how much electricity the data centers will need. But the two industries won’t move in tandem forever because they serve different roles in society. Electricity is a public resource that needs to serve a wide range of customers, including elderly people on fixed incomes and struggling families. No one bats an eyelash if Nvidia charges Microsoft a high price for microchips. But if Grandma’s electricity bill skyrockets, regulators notice.

Electricity rates have already been heading higher. Average retail rates jumped 17% from 2021 to 2023, and are up again this year. Demand from electric vehicles, factories, and data centers is one reason for the rise. Analysts have projected that data-center power use could triple by 2030 and account for as much of 10% of total U.S. electricity demand.

Regulators, utilities—which maintain power grids—and consumer advocates are starting to look more closely at who benefits from electricity contracts, and who pays. The FERC ruling is just one example.

PJM, the nation’s largest electricity grid operator, recently delayed a power auction to address concerns raised in a complaint from the Sierra Club and consumer advocacy group Public Citizen that it is overpaying power companies like Talen, Vistra, and Constellation for reliable power. The last PJM auction resulted in projected payments that are nine times as high as current prices—which will invariably lead to higher consumer prices.

PJM says that the higher rates were necessary to encourage more power companies to build plants and increase electricity supply to meet surging demand. But if regulators find that the payments are too high, power companies could lose out and consumers could get rebates. And future auctions would probably be less lucrative for the power companies, too.

In addition, some utilities are demanding that tech companies pay more to access power for their data centers. American Electric Power Ohio said that it has gotten so many requests to power data centers that the region’s power demand is on track to double in a decade. Building out all of those transmission lines won’t be cheap, and AEP asked the tech companies to pay more. A settlement in that case is pending.

Eventually, regulators will have to determine who pays for all this electricity infrastructure. Some of those costs will be borne by the tech companies, some will be passed directly through to consumer bills, and some may have to be absorbed by the utilities. Power plant owners like Vistra, Constellation, and Talen that sell the electricity to utilities and corporations should still benefit, but their gains aren’t unlimited. The stocks already discount substantial earnings growth for years ahead. Constellation, for example, trades at 19 times its projected 2028 earnings.

The politics of electricity may only get more complicated from here. The two FERC commissioners who voted against the Amazon deal are Republicans, while the one dissenter is a Democrat. (Two other Democratic regulators recused themselves from the case for unexplained reasons.) While Republican-appointed regulators have a reputation for siding with corporate interests, that hasn’t always been the case in electricity markets, says Tyson Slocum, director of Public Citizen’s energy program. Texas Lt. Gov. Dan Patrick, a conservative Republican, has raised concerns about how the growth of data centers could affect Texas electricity consumers.

Electricity is a “hot political issue,” Slocum says. “Any policy that’s seen as exacerbating energy costs—because energy costs are inherently regressive—can become a flashpoint.”

He thinks new political alliances are forming and could affect companies. “There are very interesting stakeholder differences here,” he says. “This is unprecedented.”