America’s Power Grid

The biggest machine on Earth delivers more than $400 billion of electricity a year across nearly 7 million miles of transmission and distribution lines. It’s the U.S. power grid, an interconnected system of generating plants, wires, transformers and substations that keeps the lights on for the homes, offices and factories of the world’s largest economy. It’s also an aging dinosaur that sorely needs an upgrade to its more than $1 trillion in infrastructure. Improvements would make the grid more reliable, resilient and efficient, cutting the nation’s carbon emissions. But it’s not clear where the money will come from. Electricity sales have flatlined as users have become more energy-efficient. More and more power customers are bypassing their local utility, in search of cleaner energy, including some of the nation’s biggest corporations. Every one that unplugs is another blow to the utilities that must keep the power flowing, edging them closer to what’s often described a “death spiral.” At stake is not only the health of the grid, but the nation’s ability to shift to a greener energy future.

Utilities are facing serious business challenges. Large users like Google, Amazon, Facebook and Wal-Mart are defecting, opting to buy power directly from renewable power developers while still using the grid for delivery. Distributed energy technologies such as rooftop solar that offer customers greater control over their energy use are becoming more popular as they fall in cost. Monopoly utilities in Virginia and Arizona are threatened by efforts that would allow residents and businesses to pick their electricity provider and make it easier for renewable power producers to compete. In California, more than 10 million customers now get their power supplied by a local government agency instead of an investor-owned utility; in December, the state hit the milestone of 1 million solar rooftops. At the same time, utilities are making $100 billion in investments annually to upgrade their aging grids. They also face pressure to make their infrastructure more resilient to extreme weather events, which are becoming more frequent because of climate change. PG&E, California’s largest utility, filed for bankruptcy in large part because of costs from wildfires in 2017 and 2018 linked to its equipment — fires whose increased frequency and severity have been tied to climate change. In 2019, the utility dealt with the threat by cutting power to millions of customers on high fire-risk days.