Energy Department will spend $2B to squeeze more electricity from the aging grid
The Energy Department is allocating nearly $2 billion across 26 states to upgrade the aging power grid and increase electricity capacity, largely to meet demand from artificial intelligence and new data centers. This initiative aims to improve grid reliability and lower electricity costs for millions of Americans. PPL Corp. in Pennsylvania is a recipient, using $71.5 million to modernize a transmission line due to significant data center growth in its service area.
The Energy Department announced a nearly $2 billion investment to modernize the nation's aging and stressed power grid, aiming to boost electricity capacity by over 23 gigawatts across 31 projects in 26 states. This initiative, promoted by Energy Secretary Chris Wright at a PPL Corp. facility in Allentown, Pennsylvania, seeks to improve power reliability and lower costs for about 100 million Americans, directly addressing the surging energy demand primarily driven by artificial intelligence and the rapid expansion of data centers.
One significant recipient, PPL Corp., an eastern Pennsylvania electric utility, will receive $71.5 million to upgrade a 30-mile high-voltage transmission line. PPL noted that its service territory has seen two new data centers come online this year, with six more under construction and additional facilities in advanced planning stages, potentially quintupling its peak electric demand by 2032.
The federal funding, originating from the bipartisan infrastructure law enacted under then-President Joe Biden, will be matched by $3.35 billion from recipients, including utilities, cooperatives, and state agencies in Colorado, Indiana, Ohio, and Oklahoma. This effort comes amidst growing concerns that AI's power requirements are overwhelming existing U.S. power supplies and that rising electricity bills are partly attributable to data center demand, sparking increasing public opposition across the country. Despite this, the Trump administration has emphasized supporting data center development and connecting them to power infrastructure.