The November 3 midterm elections saw Democrats achieve majorities in both the House and Senate as well as win gubernatorial races in several states. These developments have clear implications for the utility regulatory environments in several jurisdictions that should not be overlooked. Most notably, Democratic strength extended down the ballot in many jurisdictions that directly elect public utility commissioners, significantly altering the makeup of commissions in several traditional Republican strongholds. Even in jurisdictions with appointed commissioners, a change in gubernatorial party may similarly alter commission makeup (albeit more slowly and with potential legal constraints on who can be selected). Finally, these changes in political leadership may presage legislative initiatives designed to address utility affordability and/or data center restrictions – commonly articulated priorities for many newly elected candidates.
The following sections summarize the states most likely to experience significant changes to the current regulatory environment (as measured by the most recent FactSet Utility Jurisdiction Rankings, an assessment of regulatory risk based on factors such as allowed ROE, regulatory lag, and other key dynamics) as a result of the 2026 midterm elections.
Jurisdictions at Highest Risk
Texas
Current FactSet Utility Jurisdiction Ranking: Tier 4 – Average
Commissioner Selection Method: Appointed (Public Utility Commission of Texas), Elected (Texas Railroad Commission)
Texas saw Democrats elected to statewide offices for the first time in decades, with Gina Hinojosa defeating incumbent Greg Abbott in the gubernatorial race and James Talarico defeating Ken Paxton in the senatorial race. An oft-cited reason for these outcomes is growing discontent with data center construction, and indeed the Governor-Elect has suggested directing the Texas PUC to freeze rates for residential customers until stricter laws are put into place to ensure that costs related to data centers and other high-load customers are not passed on to other ratepayers. In addition, Governor-Elect Hinojosa has expressed support for extending the existing moratorium on data center construction (put in place by Gov. Abbott) indefinitely as this legislative process plays out. Finally, as Governor, Hinojosa will have the ability to appoint commissioners to the PUCT. Currently, Commissioner Courtney Hjaltman is seated on an interim appointment that technically expired in September 2025, while Commissioner Kathleen Jackson and Commissioner Patrick Rhode have terms that are set to expire in September 2027. While the PUCT is technically non-partisan, this will give Governor-Elect Hinojosa considerable latitude to reshape the Commission in the relatively near future. Collectively, there is a strong possibility that utilities will face greater scrutiny related to proposed infrastructure additions (particularly projects related to data centers), as well as regulators more focused on affordability issues and the rights of property owners impacted by proposed transmission corridors during Hinojosa’s term and beyond.
Georgia
Current FactSet Utility Jurisdiction Ranking: Tier 1 – Most Constructive
Commissioner Selection Method: Elected (Georgia Public Service Commission)
Georgia has long been considered one of the most utility-friendly jurisdictions in the US (as reflected in its top-tier classification in the last iteration of FactSet’s jurisdictional rankings). However, this historically cordial regulatory relationship will be put to the test, as leadership of the GPSC is set to change hands with Democratic commissioners now holding three of the five seats after decades of Republican control. Commissioner Peter Hubbard retained the seat he won in a 2025 special election, while Shelia Edwards defeated her Republican challenger to cement Democratic control of the GPSC. With Georgia Power (the state’s largest utility) in a rate freeze agreement through at least the end of 2028, the initial impact of the change may be somewhat muted. However, with growing opposition to data centers, mounting affordability concerns, and six-year commissioner terms, utilities are almost certain to face greater scrutiny and regulatory friction than they have seen in decades. In particular, the newly constituted GPSC will decide the certification of new generation in the context of the 2026 All-Source Capacity Request for Proposals (Docket 56368) in 2027. In its Q3 2026 earnings call, Southern Company indicated that it currently has 14.5 GW of contracted data center load under Georgia Power.
Jurisdictions at Moderate Risk
Arizona
Current FactSet Utility Jurisdiction Ranking: Tier 6 – Non-Constructive
Commissioner Selection Method: Elected (Arizona Corporation Commission)
While final results are still pending at the time of publication, Democrats Jonathon Hill and Clara Platte are on track to claim two seats on the currently all-Republican, five-seat Arizona Corporation Commission. While Republicans will continue to hold a majority on the ACC, there is a possibility that this change could lead to a return to the historically highly contentious regulatory environment long present in Arizona. However, initial impacts may be mitigated by the fact that both Arizona Public Service and Tucson Electric Power have current, late-stage rate cases likely to be decided by the existing Commission before the end of the year, with further mitigation possible given the likelihood of a move to formula rate regulation for all of the state’s largest utilities.
Ohio
Current FactSet Utility Jurisdiction Ranking: Tier 4 – Average
Commissioner Selection Method: Appointed (Public Utilities Commission of Ohio)
Newly elected Governor Dr. Amy Acton has proposed a conditional moratorium on new data center construction in order to establish enhanced legislative guardrails ensuring transparent cost recovery that does not impact other ratepayers, requirements for union labor, and site selection requirements among other factors. In addition, Governor-Elect Acton will be responsible for appointing commissioners to the PUCO. However, only one commissioner on the five-seat PUCO (Daniel Conway) has a term that ends before 2028. In addition, by Ohio law, the Governor can only appoint commissioners from a list prepared by the PUCO nominating council and the choice must also be approved by the Republican-controlled state senate. As such, the impact on PUCO composition is likely to be limited.
Jurisdictions at Low to Negligible Risk
While election outcomes could result in significant changes to the regulatory environments in the jurisdictions outlined above, it is important to note that there are also many jurisdictions that will likely avoid immediate impacts. In particular, Alabama, Louisiana, Montana, Nebraska, and Oklahoma all held elections for public utility commission seats that resulted in no change to commission composition. As there was also no change in gubernatorial or legislative alignment in any of these cases, these jurisdictions are likely to see little or no related changes to their regulatory environments.
Conclusion
While election rhetoric does not always match subsequent results, the prominence of resistance to data center construction and energy affordability as integral campaign issues throughout the country likely signals significant changes to the regulatory environments in several key jurisdictions. While the jurisdictions discussed above are at the greatest risk of impacts in the near-term, if these issues continue to grow in importance, the impacts are likely to be felt across the country and merit close scrutiny for all investors in this sector.
This blog post is for informational purposes only. The information contained in this blog post is not legal, tax, or investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.