The Late 1990s Power Plant Building Boom
State electricity deregulation combined with historically cheap natural gas prices triggered a massive buildout of gas-fired power plants across the United States. Utilities and independent power producers assumed natural gas would remain cheap indefinitely, investing billions in combined-cycle and simple-cycle turbines. Over 200 GW of new gas capacity was proposed, with significant construction concentrated in deregulated markets like Texas, the Northeast, and California.
Natural gas prices spiked unexpectedly from $2-3/MMBtu in the late 1990s to over $10/MMBtu by 2005, making many new plants uneconomical and leading to bankruptcy for several independent power producers.
The gas infrastructure built during this period became the backbone of the modern grid's flexibility, enabling the integration of variable renewable energy two decades later. The boom-bust cycle taught utilities painful lessons about commodity price risk.
Today's infrastructure sprint mirrors the late 1990s optimism about a single fuel source meeting surging demand. Then it was cheap gas enabling deregulation; now it's AI-driven load growth requiring fast-build generation. The question is whether history will repeat with price volatility or stranded assets.