The U.S. power infrastructure is buckling under unprecedented strain, and the cracks are showing. The grid, a sprawling network of generation, transmission, and distribution systems, is outdated and overextended. It’s a physical fabric that’s been patched and retrofitted for decades, but it’s no longer up to the task of absorbing the relentless growth from electrification and data centers. The North American Electric Reliability Corporation (NERC) has sounded the alarm: the grid is stretched, and the reliability threats are escalating.
John Moura, NERC’s director of reliability assessment and performance analysis, doesn’t mince words. “We’ve done a lot as a cross-sector industry—gas and electric—to make sure we’re operating efficiently, reliably, cost-effectively, and affordably,” he told POWER. “But as demand grows, we’ve got to build infrastructure. We really don’t see a lot of ways around it.” The infrastructure “gap” has been a longstanding concern, but the pressure is now acute. Historically, grid buildout has been reactive and incremental, advancing in fits and starts. Many utilities have found little incentive to extend transmission lines across jurisdictional divides, and policy shifts with every changing administration have left the system misaligned.
Adding to the strain is a new class of high-density load from data centers, AI clusters, electrified industry, and synthetic fuel production. Utilities and grid planners are scrambling to adapt. American Electric Power (AEP), for instance, has more than 180 GW of load in its queue, five times its system peak, and is already investing in 20 GW of new capacity. Regional transmission organizations (RTOs) and independent system operators (ISOs) are revising their forecasts sharply. PJM Interconnection projects a 47% rise in summer peak load by 2039, MISO expects a 60% surge over the next two decades, and ERCOT forecasts its summer peak demand will climb 69% by 2031. These projections highlight the mounting pressure on grid planning and capacity buildout timelines.
But demand forecasts remain a wildcard. At the Enverus Evolve conference in Houston this May, experts warned that the scope and scale of digital infrastructure, particularly AI-enabled data centers, are outpacing traditional planning models. Mark Mills, executive director of the National Center for Energy Analytics, described the growth phase as “very different, complicated.” He pointed to the energy intensity of AI inference, noting that an Nvidia cluster, 1-GW-scale data center, uses as much LNG every day as every single launch on a SpaceX Starship. Mills also predicted that deep-pocketed tech companies may follow behind-the-meter models, which could become dominant in the next five to six years.
Ryan Luther, director of energy transition research at Enverus, echoed the scale of uncertainty, describing the sector’s expansion as “a capital treadmill.” He noted that building a new gigawatt data center requires about $37 billion of capital expenditure upfront, with chips alone costing $27 billion. While utilities may not have that type of leverage, tech companies have large cash reserves and may be uniquely positioned to sustain the investment cycle.
The American Society of Civil Engineers (ASCE) has given U.S. energy infrastructure a dismal D+, citing aging infrastructure, investment shortfalls, and a widening mismatch between grid capability and modern demands. The mark represents a downgrade from the C– rating the sector received in 2021. According to the 2025 report, 70% of transmission lines and transformers are more than 25 years old, 60% of circuit breakers exceed 30 years, and half of the nation’s gas pipelines date back to the 1950s and 1960s. These components are slipping into obsolescence, increasingly unable to accommodate the modern power system’s demands.
The implications are visible. Weather-related events have accounted for 80% of major grid outages since 2000, and the system still lacks basic hardening. Aging transformers, deteriorating substations, and overloaded distribution lines have become liabilities as utilities battle against outages, wildfires, and storm-related damage. On the gas pipeline side, between 2013 and 2022, the U.S. reported more than 1,100 significant incidents, resulting in over $4 billion in damage, 470 injuries, and 90 deaths.
So, what will it take to future-proof the grid? The answer lies in a multi-pronged approach that addresses the financial, physical, and institutional challenges. Financially, utilities need stable, long-term investment mechanisms that prioritize modernization