Energy Department Puts Nearly $2 Billion Into Squeezing More Power From Aging U.S. Grid

The Energy Department will spend almost $2 billion to squeeze more electricity out of the nation's aging and stressed power grid, as President Donald Trump's administration steps up efforts to avoid blackouts amid skyrocketing energy demand spurred by artificial intelligence.

The money will fund 31 projects across 26 states, the department said. Together they are expected to produce more than 23 gigawatts of additional electricity capacity — enough to power 16 million homes. The projects will deploy new technologies such as sensors and other devices that measure real-time weather conditions to ensure safe transmission or direct power away from congested or overloaded paths.

Officials said the upgrades could improve power reliability and lower electricity costs for about 100 million Americans.

"These investments will get more out of the infrastructure we already have, move more electricity across the grid, and help deliver affordable, reliable and secure power that will fuel American prosperity for decades to come," Energy Secretary Chris Wright said in a statement.

Wright was set to announce the grant program Thursday in Allentown, Pennsylvania. The Associated Press obtained program details before its public release.

The announcement lands amid warnings that AI's voracious appetite 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 country, blamed in some areas on demand from data centers.

Political friction is mounting. Snowballing community opposition to data centers has thrown a wrench into the plans of the world's richest companies and transformed the midterm election landscape. Trump continues to defend the facilities even as politicians from both major parties criticize them and many communities try to block them. Last month, Trump, a Republican, said U.S. communities without data centers will "end up being backwards and poor."

Congress and some states are trying to push regulators to require utilities to adopt technology and new components that make grids more efficient and better able to serve new customers without additional power sources.

The incentive problem is structural. Utilities — which have seen rising profits and share prices during the data center-fueled energy boom — tend to avoid 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, according to utility critics.

The projects announced Thursday will involve component enhancements on more than 1,500 miles (2,400 kilometers) of transmission lines and technological enhancements across nearly 21,000 miles (34,000 kilometers), the department said.

Officials said the department prioritized projects that can be put into operation quickly. The funding comes from the bipartisan infrastructure law enacted by Congress under then-President Joe Biden, a Democrat. The government's $1.9 billion will be matched by $3.35 billion in cost-share funding from the recipients, the Energy Department said.

The grid push fits a broader energy agenda. Trump has vowed to "unleash" the nation's energy sector in his second term, aiming to drive up record-setting domestic oil and gas production, strip away pollution restrictions on power plants and keep expensive coal-fired plants operating past their retirement dates.

His administration has also pushed to help tech giants build and connect data centers to power plants and high-voltage power lines, and to convert Cold War-era uranium enrichment plants into data center and power plant complexes. Trump's Environmental Protection Agency this summer issued a plan that would make it harder for the public to learn about and comment on proposed AI data centers.

With federal money now flowing into grid upgrades at nearly a two-to-one private match, the bet in Washington is that smarter transmission — not just new generation — can buy the power system time while AI demand keeps climbing.