US Energy Department to spend $2 billion on 31 grid upgrade projects

September 24, 2026 at 09:05 PM2 min

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The U.S. Energy Department will announce nearly $2 billion in grants for 31 projects across 26 states to add more than 23 gigawatts of capacity to the aging power grid. Energy Secretary Chris Wright is set to unveil the program Thursday in Allentown, Pennsylvania. The initiative aims to improve reliability and lower costs for about 100 million Americans as AI-driven demand strains the grid.

Key Facts

The Energy Department will spend almost $2 billion on 31 projects across 26 states.
The projects are expected to produce more than 23 gigawatts of additional electricity capacity, enough to power 16 million homes.
Energy Secretary Chris Wright will announce the grant program Thursday in Allentown, Pennsylvania.
The upgrades could improve power reliability and lower electricity costs for about 100 million Americans.
Projects will involve component enhancements on more than 1,500 miles of transmission lines and technological enhancements across nearly 21,000 miles.

Grant Program Details

The Energy Department will spend almost $2 billion on 31 projects across 26 states. The projects are expected to produce more than 23 gigawatts of additional electricity capacity, enough to power 16 million homes. The projects will use new technologies such as sensors and other devices to measure real-time weather conditions to ensure safe transmission or direct power away from congested or overloaded paths. Projects were prioritized based on those that can be put into operation quickly.

AI Demand and Grid Strain

The announcement comes amid warnings that AI's voracious demand for power is threatening to overwhelm U.S. power supplies, as massive new data centers come online faster than new power plants can be built. Electricity bills are rising faster than inflation in many parts of the U.S., blamed in some areas on demand from data centers. President Donald Trump said last month that U.S. communities that don't have data centers will "end up being backwards and poor." Congress and some states are trying to push regulators to require utilities to use technology and new components to make grids more efficient.

Utility Incentives and Opposition

Utilities have seen rising profits and share prices during the data center-fueled energy boom. Utility critics say utilities tend to stay away from such efficiencies because they make more money from building new power plants and grid infrastructure projects that are more expensive and take longer to complete. Snowballing opposition to data centers in communities across the country has thrown a wrench into the plans of the world's richest companies and transformed the midterm election landscape.