US Grid Needs Billions in Upgrades Amid AI Surge

The United States Department of Energy reports that the national electric grid is under severe strain, requiring the replacement of approximately 4,000 miles of power lines annually for several decades. According to the National Transmission Needs Study, electricity consumption is projected to rise between 16% and 25% by 2034, driven largely by the expansion of AI data centers. These facilities consumed 4% of all U.S. electricity in 2023, a figure expected to reach 12% by 2028.

During a visit to Jefferson City, federal officials stated that AI data center operators, rather than residential ratepayers, should bear the costs of these infrastructure upgrades. The modernization effort involves reconductoring old lines from the 1960s and 1970s to increase electron capacity and resilience against severe weather and cyberattacks.

Conflict has emerged over how to execute these upgrades. A group of nine electric transmission utilities, including Ameren and Evergy, is seeking the right of first refusal from federal regulators to build multi-state power lines. This would allow them to bypass competitive bidding to accelerate construction. However, the Missouri Office of Public Counsel and other consumer advocates oppose the move, arguing that competitive bidding is essential to curb costs and prevent residential customers from being exposed to excessive charges.