Impact of New Tariffs on U.S. Utility Companies

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Donald Trump’s April 2025 “Liberation Day” tariffs will likely have a wide-reaching impact on most U.S. industries, including the utility sector.  But the good news is that the largest U.S. utilities expect the impact to be manageable, if not minimal.  Let’s take a pulse on how industry leaders feel about the effects of the new tariffs.

How Impactful will Trump’s New Tariffs Be?

Based on what was said during the recent round of 1Q 2025 earnings calls, it appears as though leaders from the largest U.S. utilities are unfazed about these developments.  The consensus is that the impact will likely be immaterial because most capital expenditures are sourced in the U.S.

In fact, executives representing 8 of the largest utility companies largely preached a similar narrative – the tariff impact should be minimal due to proactive supply chain management, contract protections and long-term planning.

Here are a few snippets from the relevant 1Q earnings-call comments:

• Xcel Energy: Estimates a total tariff exposure of 2-3% on its $45 billion base capital plan for 2025 to 2029.
• FirstEnergy: Estimates a total tariff exposure of less than 0.2% of its $28 billion capital investment program.
• NextEra: Estimates a total tariff exposure of less than 0.2% of its planned $75 billion capital investment through 2028.
• Entergy: Estimates a total tariff exposure of approximately 1% of its 4-year $37 billion capital plan.
• DTE Energy: Estimates a total tariff exposure of 1-2% of its capital plan.
• Southern Co.: The CEO explained that the utility will leverage “strong vendor relationships to help navigate such challenges.”
• PPL Utilities: The CFO explained that the utility is “well-positioned” to manage the tariffs.

As you can see, the largest U.S. utilities do not seem all that concerned with this turn of events.  Now, it is unclear if smaller utilities share this same sentiment, but for now, the feedback from the industry on the impact of Trump’s new tariffs seems to be largely positive.