AI Is Stress-Testing the Grid—Here’s What Washington Can Do to Help
By Bridget Bartol
A recent Wall Street Journal front-page report underscored a hard truth: electricity demand is accelerating faster than America’s grid can expand.
The surge is being driven by AI and data centers, which is especially acute across the 13-state region served by PJM. Other drivers such as advanced manufacturing and broader electrification trends are contributing to this strain.
Families and businesses are already feeling this system imbalance through rising rates, and grid operators are warning that severe weather – like many Americans experienced last month as snow and ice pummeled large swaths of the country – could push the system toward emergency conditions.
As NEMA President & CEO Debra Phillips wrote in a recent letter to the WSJ, electrical manufacturers are doing their part, responding with investment across the U.S. But policymakers must keep up.
Since 2018, the electroindustry has invested nearly $200 billion in U.S. manufacturing, with another $60 billion planned over the next five years to help meet rising demand. But too many projects at every level of the electricity system (generation, transmission, substations, and the equipment needed to connect them) are still delayed by slow permitting timelines, fragmented siting decisions, and policy uncertainty.
Recent announcements underscore just how significant that private-sector response has become. Siemens Energy recently finalized plans to invest $1 billion to expand U.S. manufacturing capacity for grid equipment and gas turbines — creating more than 1,500 highly skilled jobs across North Carolina, Alabama, New York, Texas, Florida, and Mississippi.
The investment includes transformer production expansions, gas turbine manufacturing, and the construction of a new high-voltage switchgear facility in Mississippi. All are critical components needed to strengthen grid infrastructure and bring new power in front of and behind the meter online faster. Siemens Energy is also expanding apprenticeship and workforce training programs to help ensure the skilled labor pipeline keeps pace with demand.
These targeted expansions reflect a broader reality: manufacturers see the surge in electricity demand driven by AI, data centers, and industrial electrification, and they are scaling up accordingly.
That’s why Washington must act. NEMA recently released the U.S. Electroindustry’s 2026 Policy Agenda, which focuses on practical, bipartisan steps Congress and the Administration can take now to protect consumers and keep reliability in balance as demand surges.
- The agenda prioritizes speeding up grid buildout by streamlining federal permitting timelines and bringing more certainty to siting and approvals. We know available hardware and software solutions can get more out of our existing transmission system, moving more power where it’s already needed. At the same time, these upgrades will give us space to accelerate long-term investments in new high-voltage and low voltage electricity infrastructure – allowing more electrons to get more places.
- It also calls for expanding domestic manufacturing capacity for essential equipment—especially distribution transformers and other critical components—so projects aren’t stalled by supply constraints. This administration and Congress recently acknowledged the importance of growing domestic grid manufacturing, directing the U.S. Department of Energy to designate $375 million worth of investment to distribution transformers and critical grid components. We know that’s just the start as we focus on reshoring supply chains to meet demand while maintaining high-security and reliability demands.
- And it emphasizes reinforcing North American supply chains and strengthening the workforce pipeline, so manufacturers have both the materials and the skilled talent needed to build, install, and maintain the infrastructure the moment demands.
The demand is here and growing.
With the right policy framework, the U.S. can build the grid faster, keep costs down, and ensure America’s next wave of economic growth is powered by safe, reliable, affordable electricity.
Bridget Bartol is Executive Director, Regulatory and Industry Affairs at the National Electrical Manufacturers Association. She brings more than 15 years of policy and regulatory experience to NEMA, most recently serving as Deputy Chief of Staff and Senior Advisor to the Secretary at the U.S. Department of Energy (DOE)