Supplies Are Shrinking, Systems Are Straining

Growing demands for electricity are taking a toll on our nation’s power supplies and delivery systems. Electric companies are working harder than ever to provide reliable, affordable, and increasingly clean electricity to their customers—in the face of considerable challenges.

In recent years, the costs to generate and deliver electricity to American homes, businesses, and industries have been increasing. Fluctuating fuel and purchased power expenses, particularly for fossil fuels, can significantly drive up these costs. 

At the same time, generation reserve or capacity margins are declining in most U.S. regions. Within the next 2 to 3 years, they will likely drop below minimum regional target levels in parts of 5 of the 8 national electric reliability regions.

The electricity delivery system—the transmission grid that delivers high-voltage electricity from generators to substations and the distribution lines and infrastructure that reduce the voltage and deliver it to retail customers—is also overtaxed. 

For the most part, the delivery system largely reflects technology developed in the 1950s or earlier: 

• 70% of transmission lines are 25 years or older.
• 70% of power transformers are 25 years or older.
• 60% of circuit breakers are more than 30 years old.¹

The strain is beginning to show. Today the system is being pushed to serve regional power markets and to perform functions for which it was not originally designed. At the same time, underinvestment in transmission and distribution is estimated to cost the American economy at least $20 billion a year—a number certain to grow if investment doesn’t keep pace with demand.²

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