Regulated utilities in the United States are facing a myriad of challenges that require intensive capital investments, from updating and replacing aging infrastructure to adopting smart-grid technologies to investing to meet new environmental standards. According to U.S. Regulated Electric Utilities’ Annual Capital Spending Is Poised to Eclipse $100 Billion, a report by Standard & Poor’s, “this ever-growing need to fund improvement projects and comply with upcoming regulations could pressure utilities’ financial measures, resulting in almost consistent negative discretionary cash flow throughout this higher construction period.”

Despite the pressures, Standard & Poor’s believes most U.S. regulated utilities will be able to maintain their investment-grade credit quality through effective management of regulatory risks as well as securing financing by new creative methods. Capital spending should reach $95 billion in 2014 and dec