By Jennifer Hiller
America's rickety electric grid is entering the hottest months of the year with a record-setting amount of new power generation — but plenty of problems.
An influx of 58.5 gigawatts of new resources, dominated by solar and battery storage, has reduced the widespread blackout risks the country faced in recent years . That is according to the North American Electric Reliability Corporation, a nonprofit tasked with monitoring the reliability of the U.S. power system.
The estimate suggests the U.S. should have plenty of power supplies under normal summer conditions. Forecasts, though, call for a hotter-than-usual season, and a heat dome has much of the country in its grip.
Temperatures are expected to top 100 degrees in New York, Philadelphia, Baltimore, Washington, D.C., and other cities this week when a dangerous heat wave and high humidity engulf the eastern two-thirds of the U.S.
The risk of blackouts is still considered small. But PJM Interconnection, which manages the grid for about 67 million people across the mid-Atlantic and Midwest, received permission through an Energy Department emergency order to curtail power to data centers and other large customers. That measure is meant to be taken only as a last resort, and only if those customers have their own backup generation on site.
Drought-depleted reservoirs, wildfires and a surge in energy demand tied to the artificial-intelligence race are exacerbating the situation, according to NERC.
"I've called this a hyper-complex risk environment for the sector. I've been quoted as describing the situation as a five-alarm fire," said Jim Robb, the nonprofit's chief executive. "And I think those both continue to be apt descriptors of what the electric sector is facing."
As summer begins, here are some of the challenges to watch:
High temperatures — and bills
Hot weather sends air-conditioning demand skyrocketing, pressuring both power supplies and electricity bills.
Peak summer demand has grown by about 11 gigawatts since last year, according to NERC, thanks to data centers and other big customers.
That's been met by the new resources that include about 30.5 gigawatts of solar, 16 gigawatts of battery storage and 7 gigawatts of natural gas-fired generation. Some of those power sources have limitations, though. Solar is available intermittently, and batteries can supply power for a few hours.
U.S. households are expected to spend about 10.5% more to cool their homes this summer than last , according to a report from the National Energy Assistance Directors Association and the Center for Energy Poverty and Climate.
The groups project the cost of cooling the typical American household between June and September will average $792, up from $717 last year. Summer cooling costs have increased nearly 40% since 2020, driven by a combination of rising electricity prices and hotter summers.
The one component of our power bills that isn't expected to rise as much: fuel costs.
Benchmark U.S. natural-gas futures are trading about 10% below year-ago levels thanks to strong domestic production and comfortable spring weather that enabled traders to sock away fuel in storage caverns. Supplies are especially robust in the West, where inventories are roughly 23% higher than the five-year average, according to the Energy Information Administration.
The EIA forecasts that the volume of natural gas burned to generate electricity will be about the same as last summer, with renewable energy sources, such as solar farms, meeting the added demand for air conditioning.
Unpredictable AI
The soaring power needs of big customers, primarily AI data centers, are introducing new reliability risks. Among the potential operational challenges: data centers suddenly dropping off the grid.
In some instances, clusters of data centers have severed their grid connections and automatically shifted to using their own on-site backup power when a transmission line malfunctioned, NERC has found. A collective exit can destabilize the system and create a scramble to balance power supply and demand. An imbalance can cause power plants to fail, resulting in blackouts and difficult repairs.
In May, NERC issued a rare alert — only the third of its kind — telling utilities to overhaul how they track and plan for huge customers. Grid operators in Texas and elsewhere have been establishing "ride-through" requirements that ensure data centers and other big customers don't abruptly unplug during a minor glitch.
"What we're worried about with data centers is that they'll stop taking power instantaneously because these aren't spinning machines," Robb said. "They're power electronics. So things happen very, very quickly and that could induce all kinds of oscillations and other issues for the rest of the grid."
Research and consulting firm Wood Mackenzie has tracked a related challenge: data centers consuming electricity in unpredictable ways.
The firm's sensors, which monitor the electromagnetic fields around transmission lines, captured instances of large data centers swinging power consumption by 50 megawatts or more within minutes. That is equivalent to the electricity needed to power about 50 Walmart stores.
The volatility poses risks to the grid and could damage on-site equipment, including reciprocating engines for backup power and batteries designed to absorb sudden changes.
"Just maintaining a stable, reliable, efficient system within a campus itself is becoming an enormous challenge given the level of volatility of these loads," said Ben Hertz-Shargel of Wood Mackenzie.
Outage risks
Other summer hazards include drought, fires and hurricanes, all of which can lead to extended power outages and expensive repairs.
Record-low snowpack across the West is lowering reservoir levels and could curb production of low-cost hydropower. Utilities would have to cover any power shortages with wholesale purchases, passing on those higher costs to customers. Wildfires pose the greatest reliability risk in the Rocky Mountains, where they can disproportionately affect rural cooperatives, according to NERC.
Elsewhere, lower water volumes in the Missouri and Mississippi River basins threaten to disrupt coal shipments by barge, a Federal Energy Regulatory Commission report warned. Low water levels or increased water temperatures could also lead to forced outages at power plants that depend on river water for cooling.
As for hurricanes, an emerging El Niño weather pattern is expected to reduce their formation, but warmer temperatures in Atlantic waters can cause the storms that do form to intensify rapidly, FERC said.
The grid is also more susceptible to "wind droughts." That is a risk in West Texas, where the Permian Basin oil field has electrified operations and crypto miners and AI data centers have expanded operations. High customer demand combined with low wind and solar output could create a potential power shortage, NERC said.
The Electric Reliability Council of Texas said it has an "all-of-the-above approach to generation" and will "continue to operate the grid conservatively, bringing generating resources online early to mitigate sudden changes in generation or demand."
Write to Jennifer Hiller at jennifer.hiller@wsj.com