America races to rebuild its aging power grid before demand overwhelms it

Overview

Updated Jul 3

Seventy percent of America's power lines and transformers are over 25 years old. On June 30, 2026, Secretary Wright issued two emergency orders for the Mid-Atlantic grid after PJM Interconnection forecast demand near 166,000 megawatts—approaching the region's all-time record.

Federal investment is catching up, slowly. The DOE's $1.9 billion SPARK program, announced in March 2026, funds reconductoring—replacing old wires with advanced conductors that double capacity on existing rights-of-way. In April 2026, President Trump invoked the Defense Production Act to address transformer order backlogs stretching past 12 months.

Why it matters

When demand spikes faster than the grid can keep up, regulators waive pollution limits and cut power to data centers to prevent blackouts.

Questions about this story

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America needs much more power to win the AI race. How are we realisticly going to be able to pull this off? To me we are talking about 2 or 3 years at most. Will we have the power that quickly?

The US will not close the power gap in 2–3 years — natural gas plants are the fastest lever and can come online by 2027–2028, but grid interconnection backlogs and aging transmission mean a genuine crunch is baked in through at least 2028.

AI companies are racing to deploy compute that requires power the grid cannot yet deliver, which means data center buildouts will stall or costs will spike before supply catches up.

4 details5 sources2 disagreements

The demand target is enormous: AI data centers need roughly 29 GW of additional power by 2027 and 67 more GW by 2030; Anthropic projects the US AI sector alone needs 50 GW of new capacity by 2028.
Natural gas is the fastest path — the US nearly tripled its gas-fired capacity in development in 2025, a buildout that could expand total US gas power by 50% if completed, with new plants coming online in 2–3 years.
Nuclear helps at the margin but not at scale in this window: Three Mile Island's 835 MW restart delivers for Microsoft by 2027; small modular reactors (SMRs) won't be commissioned until post-2030.
The hard bottleneck is interconnection, not just generation — roughly 2,300 GW of projects sit in queue, and the median wait from application to commercial operation has doubled to over 4 years since 2000, meaning new power plants can be built but struggle to connect to the grid in time.

Room for disagreement

Goldman Sachs and some utility analysts argue the natural gas sprint plus nuclear restarts can substantially close the gap by 2028 if permitting is streamlined under current federal policy — they point to the scale of gas capacity now in development as underappreciated.
The IEA and Brookings take a harder line: interconnection queue timelines and transmission constraints are structural, not just regulatory, and cannot be reformed fast enough to prevent a multi-year capacity shortfall regardless of how many plants break ground today.

0 AI answers with web search. May be wrong.

Key Indicators

$1.9B

SPARK program funding

Federal investment specifically for reconductoring and advanced transmission technology upgrades

70%

Grid infrastructure over 25 years old

Share of U.S. power lines and transformers deployed more than 25 years ago

Capacity gain from reconductoring

Advanced conductors can up to double power transfer capacity within existing rights of way

D+

ASCE energy infrastructure grade

The American Society of Civil Engineers downgraded the grid from C- to D+ in its 2025 report card

2,300 GW

Interconnection queue backlog

Generation and storage capacity waiting for grid connection as of late 2024, with typical waits of five-plus years

10-15 yrs

New transmission line timeline

Average time to permit and build a new power line, making reconductoring's speed a significant advantage

12+ months

Transformer order backlog

Lead time for new distribution transformers in early 2026 (double the historical norm), driven by data center construction, EV charging, and industrial electrification

Voices

Curated perspectives — historical figures and your fellow readers.

People Involved

Chris Wright

U.S. Secretary of Energy

In office since February 2025

Catherine (Katie) Jereza

Assistant Secretary of Energy for Electricity

Leading the Office of Electricity since October 2025

Organizations Involved

U.S. Department of Energy, Office of Electricity

Federal Agency

Administering the SPARK program

The DOE office responsible for research, development, and deployment programs that strengthen, modernize, and protect the nation's electricity delivery system.

DOE Grid Deployment Office

Federal Agency

Distributing over $26 billion in grid investments

Created under the Bipartisan Infrastructure Law to invest more than $26 billion in expanding and modernizing the electric grid.

Federal Energy Regulatory Commission (FERC)

US federal regulator

Reviewing 35-plus Order 1920 compliance proposals from utilities while implementing transmission planning reforms

The independent agency that regulates interstate transmission of electricity, natural gas, and oil, and oversees wholesale electricity market rules.

PJM Interconnection LLC

Regional transmission organization

Operating under federal emergency orders through July 3, 2026 amid near-record demand

PJM coordinates wholesale electricity movement across 13 states and the District of Columbia, serving about 65 million customers from Illinois to New Jersey.

Timeline

February 2021 June 2026

12 events Latest: June 30th, 2026 · 4 months ago Showing 8 of 12

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June 2026
Wright issues emergency orders as heat wave pushes PJM toward all-time demand record
Latest Emergency

Energy Secretary Chris Wright issued two emergency orders authorizing PJM Interconnection to curtail data centers and waive power plant pollution limits as a heat dome pushed temperatures above 100°F across the Mid-Atlantic. PJM had forecast peak demand of 166,304 megawatts, near the all-time record set in 2006, with operating reserves falling sharply.
June 30th, 2026
April 2026
Trump invokes Defense Production Act to address transformer supply chain bottleneck
Policy

President Trump signed a presidential determination under Section 303 of the Defense Production Act, directing DOE to address critical shortfalls in domestic transformer and grid equipment manufacturing. Distribution transformer order backlogs had stretched past 12 months (double the historical norm), driven by data center construction, EV charging buildouts, and industrial electrification.
April 20th, 2026
March 2026
DOE launches $1.9 billion SPARK reconductoring program
Funding

The Office of Electricity announced the SPARK funding opportunity to replace aging power lines with advanced conductors that can double capacity, targeting projects that use existing rights of way to bypass lengthy permitting. Concept papers are due April 1, full applications May 19, with selections expected in summer 2026.
March 12th, 2026
March 2025
ASCE downgrades energy grid to D+
Assessment

The American Society of Civil Engineers dropped the energy sector's grade from C- to D+ in its 2025 infrastructure report card, citing transformer shortages, weather vulnerability, and insufficient transmission capacity.
March 25th, 2025
February 2025
New Energy Secretary orders grid reliability push
Policy

Secretary Chris Wright issued his first secretarial order prioritizing grid reliability, permitting reform, and energy infrastructure modernization under the banner of "American energy dominance."
February 5th, 2025
October 2024
DOE announces $4.2 billion in second-round GRIP projects
Funding

The second round of GRIP funding selected 46 projects across 47 states, bringing total GRIP commitments to $7.6 billion across 105 projects in all 50 states.
October 18th, 2024
May 2024
FERC issues landmark transmission planning rule
Regulatory

Order 1920 required utilities to adopt 20-year planning horizons and consider advanced transmission technologies including reconductoring for the first time in over a decade of transmission policy updates.
May 13th, 2024
October 2023
DOE selects $3.46 billion in GRIP projects
Funding

The first round of Grid Resilience and Innovation Partnerships funding selected 58 projects across 44 states to strengthen grid reliability.
October 18th, 2023
July 2023
FERC issues interconnection queue reform
Regulatory

The Federal Energy Regulatory Commission issued Order 2023 to address the backlog of over 2,000 gigawatts of generation projects waiting years for grid connection.
July 28th, 2023
2022
DOE creates Grid Deployment Office
Institutional

The Department of Energy established a new office to manage over $26 billion in grid investments authorized by the infrastructure law.
2022
November 2021
Bipartisan Infrastructure Law signed
Legislation

President Biden signed the Infrastructure Investment and Jobs Act, allocating $73 billion for grid modernization over five years, the largest federal investment in electricity infrastructure in American history.
November 15th, 2021
February 2021
Texas grid collapses during Winter Storm Uri
Crisis

The largest manually controlled load-shedding event in U.S. history left 69% of Texans without power, killing at least 246 people and causing up to $300 billion in damage. The failure exposed critical vulnerabilities in aging, weather-unprepared infrastructure.
February 15th, 2021

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Scenarios

Reconductoring becomes the fast lane for grid expansion

Likely

Discussed by: GridLab, the Goldman Sachs 2035 report, and Berkeley energy researchers who model transmission buildout scenarios

If SPARK-funded projects demonstrate that advanced conductors reliably double capacity at half the cost of new lines, the approach could spread rapidly. Eighteen states have already introduced legislation encouraging grid-enhancing technologies, and FERC Order 1920 requires utilities to consider them. In this scenario, reconductoring becomes the default first option for utilities facing capacity shortfalls, significantly compressing the timeline between identifying a bottleneck and resolving it from over a decade to two or three years. The $1.9 billion in federal seed money triggers a much larger wave of utility and state spending.

Investment wave falls short as demand outpaces upgrades

Possible

Discussed by: The PJM Interconnection capacity market analysis, Bank of America grid research, and ASCE infrastructure assessments

Even with SPARK and GRIP combined, total federal grid funding represents a fraction of the estimated $720 billion Goldman Sachs says is needed through 2030. If permitting reform stalls, if utility capital plans hit supply chain bottlenecks for transformers and advanced conductors, or if AI-driven electricity demand grows faster than projected, the grid could face reliability crises in high-demand regions. PJM already projects a six-gigawatt capacity shortfall by 2027. In this scenario, rolling blackouts or emergency orders become more frequent, forcing costlier emergency measures.

Political headwinds redirect or slow grid spending

Unlikely

Discussed by: E&E News and Latitude Media, which track DOE budget politics and energy policy shifts between administrations

Federal grid programs draw from Bipartisan Infrastructure Law funds that were authorized under a different administration. If fiscal priorities shift, appropriations are redirected, or program implementation slows during administrative transitions, projects could face delays or cancellations. SPARK's application timeline extends into summer 2026, and actual construction would begin later, leaving a window for policy changes. However, grid reliability is a bipartisan concern and the current administration has publicly championed the SPARK program, reducing but not eliminating this risk.

Grid modernization becomes a sustained multi-decade national priority

Possible

Discussed by: Morningstar DBRS utility analysts projecting a capital expenditure "super-cycle," and Apollo infrastructure investment outlook

Rising demand from AI, electrification, and reshoring locks in a structural increase in grid investment that persists regardless of which party holds power. Utilities are already on pace to spend $208 billion in 2025 alone, and private capital flows into grid infrastructure accelerate. Federal programs like SPARK prove the technology, states mandate adoption, and the utility "super-cycle" sustains itself through the 2030s. In this scenario, the current moment marks the beginning of an infrastructure transformation comparable in scale to the interstate highway era, with grid capacity expanding to match 21st-century demand.

Historical Context

3 moments from history that rhyme with this story — and how they unfolded.

1935-1952

Rural Electrification Act and the TVA (1935-1952)

In 1935, only about 10% of rural Americans had electricity. President Franklin Roosevelt's Rural Electrification Administration provided federal loans to farmer cooperatives to build distribution lines, while the Tennessee Valley Authority built dams and generation capacity across the Southeast. By 1942, nearly half of American farms were electrified; by 1952, nearly all were.

Then

Rural communities gained access to refrigeration, lighting, and powered machinery, transforming agricultural productivity and quality of life within a single generation.

Now

The model of federal funding catalyzing infrastructure that private markets had failed to build became a template for subsequent national infrastructure programs.

Why this matters now

Like the 1930s electrification gap, today's grid challenge involves federal investment addressing infrastructure that private utilities have underbuilt for decades. SPARK's use of federal dollars to catalyze a technology shift mirrors how REA loans enabled rural cooperatives to extend the grid where investor-owned utilities would not.

June 1956

Federal-Aid Highway Act (1956)

President Eisenhower signed the $25 billion Federal-Aid Highway Act, the largest public works project in American history at the time (equivalent to roughly $220 billion in 2025 dollars). The law created the Highway Trust Fund and authorized 41,000 miles of interstate highways, with the federal government covering 90% of construction costs.

Then

Tens of thousands of construction jobs were created and existing roads were rapidly upgraded, reducing cross-country travel times dramatically.

Now

The interstate system reshaped American commerce, enabled suburbanization, and generated an estimated $2 in economic output for every $1 invested. It also created path dependencies that persisted for decades.

Why this matters now

The current grid investment push shares structural similarities: a federal government using large-scale funding to upgrade infrastructure that individual states and private entities were building too slowly. The utility investment "super-cycle" projected at $1.1 trillion through 2030 echoes the scale of the highway era, though this time private capital leads and federal funding provides the catalyst.

August 2003

2003 Northeast blackout

On August 14, 2003, a software bug at an Ohio utility and overgrown trees touching a high-voltage line triggered a cascading failure that shut off power to 55 million people across eight U.S. states and Ontario, Canada. It was the largest blackout in North American history, lasting up to two days in some areas.

Then

At least 11 deaths were attributed to the blackout, with economic losses estimated at $6 billion. The joint U.S.-Canada investigation identified aging infrastructure and inadequate monitoring as root causes.

Now

Congress passed the Energy Policy Act of 2005, which made compliance with reliability standards mandatory rather than voluntary, and established the North American Electric Reliability Corporation as the enforcement body.

Why this matters now

The 2003 blackout demonstrated how aging grid infrastructure creates cascading failure risks that cross state and national borders. Two decades later, the grid is older and more stressed. Programs like SPARK aim to address the same underlying vulnerability: transmission lines operating at or beyond their designed capacity on deteriorating hardware.