Why the Grid Is Lagging Behind Demand

America’s electricity demand is rising for the first time in decades, but outdated regulations and fragmented oversight have slowed necessary grid expansion. Laws from the 1930s entrenched monopoly utilities and state control and discourage interstate transmission. Without structural reform, the U.S. grid will make electricity more expensive and less reliable.

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U.S. electricity demand is climbing after decades of holding steady, driven by data centers and electrification, and the nation’s grids need to expand and upgrade to keep up. The problem isn’t technical, it’s policy — legislation and regulation.

Nearly a century of policy decisions has entrenched state-level control, utility monopolies, and bureaucratic inertia that block new generation and interstate transmission.

A law enacted in 1935 established fragmented, monopoly-based model, while later deregulation efforts shifted control without addressing core disincentives. Today, it can take 6-10 years for new power projects to connect to the grid, as utilities and states protect their own interests rather than system-wide reliability.

Fixing the grid should include a new approach to governance itself such as adopting faster interconnection models like the one in Texas or creating a new federal regime that encourages interstate coordination. Without reform, America’s outdated grid won’t be able to keep pace with demand, which will make electricity more expensive and less reliable.