On August 3 Texas Governor Greg Abbott directed the Public Utility Commission and ERCOT to verify every data-center project sitting in the state's interconnection queue and to pause new grid connections until the work is done. Four days later the grid operator failed to issue the "Batch Zero" classifications that were due under its own planning guide — the ruling that separates committed projects from speculative ones. American Electric Power, the Columbus-based utility that generates and delivers power across eleven states, had put all 45 gigawatts of its Texas large-load projects into that process, backed by $2bn of cash and credit support from hyperscalers and large industrials.

The queue under audit runs to roughly 474 gigawatts of requests, about 90% of it data centers, and ERCOT aims to finish by December 10. That date now governs the largest single block of load in AEP's capital plan. Utilities that own generation as well as wires — AEP, Entergy and NextEra Energy all do — carry construction and stranded-cost risk that a pure transmission owner does not, which is why the difference between a signed contract and a queue position is the whole argument.

What actually happened to the businesses

AEP raised 2026 operating earnings guidance to $6.25-$6.55 a share from $6.15-$6.45 on its July 30 call, lifted contracted large-load additions through 2030 to 69 gigawatts from 63 the prior quarter, and is running a $78bn five-year capital plan implying an 11% annual rate-base growth rate — roughly double the plan of four years ago. Its chief financial officer said he believes the Texas volumes are "pretty firm" and could at worst slip between batches.

There is harder evidence than a pipeline slide. AEP Ohio's approved data-center tariff requires customers to pay for at least 85% of the energy they say they need each month whether they use it or not. After it took effect, AEP Ohio cut its own large-load forecast from 30 gigawatts to 13. A binding tariff winnows. The company has also locked 13 gigawatts of gas turbines through 2031 with options on ten more — the physical constraint that decides who can actually serve the load. Against that, the diluted share count rose 2.7% year over year, the tax on funding rate base with equity.

Entergy, which serves 3 million customers across Arkansas, Louisiana, Mississippi and Texas and runs about 26,000 megawatts of capacity, is the softer case. June-quarter revenue growth decelerated to 5.9% from 12.0% in the prior quarter, adjusted earnings of $1.03 a share slipped year on year, and full-year guidance was affirmed rather than raised. Its hyperscale pipeline stayed at 7-12 gigawatts. The construction is real — Louisiana regulators approved the generation package for Meta's Richland Parish campus, with plants due in late 2028 and 2029, and fast-tracked a roughly $21bn proposal tied to a second Meta site in April. But the share count rose 4.6%, the heaviest dilution of the three, and trailing free cash flow runs at minus 6.4% of market value. On new nuclear, management said in July it is "not near where we need to be yet" and expects no firm update in 2026 or 2027.

NextEra, whose Florida Power & Light unit serves 5.7m accounts and whose Energy Resources arm is the largest US developer of contracted renewables, had the cleanest quarter: revenue up 12.4%, operating margin of 29.7% against 28.5% a year earlier, a backlog of 35.1 gigawatts, guidance untouched. Its complication is corporate. The all-stock purchase of Dominion Energy requires issuing about 716m shares — close to a quarter of the pro-forma company — with shareholder votes on September 3 and closing not expected before the second half of 2027.

What the price is doing, and what it isn't

Most of the month's decline is a rate sort. On August 21 every regulated electric name fell together — AEP 4.1%, Southern 3.0%, Entergy 2.8%, NextEra 1.9% — on a session when the S&P 500 rose 0.43%, three days after the 30-year Treasury yield reached a 19-year high above 5.33%, the same long bond against which these long-dated cash flows are discounted. Twelve of twelve regulated names fell over the month.

But the dates do not all line up on the bond. AEP and Entergy both broke months-long uptrends on August 7 — the missed Batch Zero date — before the yield spike. And the multiples now disagree with the disclosures. AEP has compressed to 19.0x forward earnings from 20.9x on its July price, the cheapest of the three, on the only raised guidance and the largest rate-base growth. Entergy, at 23.8x from 26.1x, is still the most expensive on the weakest quarter; that premium rests entirely on consensus growth of 12.3% next year and 15.9% the year after, which the June quarter did not advance. NextEra's move from 22.2x to 20.8x returns it to roughly its own long-run level and says less about artificial-intelligence load than about the equity it is about to print.

So the group fell as one thing and splits into three. Entergy's de-rating is earned. NextEra's is a merger, not a demand story. AEP's is the one the business contradicts — and the contradiction has a resolution date rather than an argument.

If the Texas audit clears AEP's 45 gigawatts, a $78bn plan built partly on 13 gigawatts of assumed Texas load has a very long runway. If it doesn't, the $2bn of hyperscaler collateral is the only part of that number anyone can bank.