ENB Pub Note: This article was on Doug Sheridan’s LinkedIn post and his insights are spot on.
Americans’ utility bills are delivering unpleasant surprises, with residential electricity prices rising at more than twice the rate of core inflation. California, Maine and New York have seen multi‑year rate hikes that would’ve been politically unthinkable a decade ago.
Politicians are scrambling to claim that America simply hasn’t invested enough in its aging grid. But the data suggest otherwise. The problem isn’t underinvestment—it’s a monumental misallocation of capital driven by political mandates and subsidies.
Between 2000 and 2025, US electricity demand grew by roughly 15%. Over that same period, nameplate generation capacity expanded by roughly 80%. For every 1% increase in actual power consumed, the grid added about 5% in physical generation and storage capacity.
That large mismatch didn’t happen by accident. It happened because policymakers forced the energy industry to build the wrong kinds of assets.
Renewable mandates and laws like the IRA pushed utilities toward intermittent wind and solar, whose low capacity factors require substantial overbuild. To wit, replacing one GW of baseload gas or coal often requires several GW’s of solar—plus utility‑scale batteries and gas‑fired backup to cover nights and weather. Every layer adds cost.
It doesn’t stop there. To connect remote wind and solar farms to population centers, utilities have also expanded transmission and distribution networks at historic scale. The US grid now includes ~600,000 miles of transmission lines and ~6 million miles of distribution. Since 2000, transmission capacity has grown 25–30%, and distribution networks have expanded roughly 20%.
The costs are off the rails. Annual transmission capex has more than tripled since 2010, rising from about $15B to more than $40B today. Distribution spending has risen sharply as well. Regulated monopolies pass these costs directly to ratepayers, who are now shouldering the burden of a sprawling, inherently less efficient grid.
Texas offers a telling illustration. After years of subsidy‑driven renewable build‑outs in West Texas and elsewhere, ERCOT now sits on more than 190 GW of supply resources for a system that has never exceeded 92 GW of peak demand. The proposed $33 billion STEP transmission system is the predictable sequel to the gratuitous overbuild—a massive public bill to accommodate a distorted generation mix. The math is now catching up to ideology.
Read more about Ercot at EnergyPoint Research.
Americans are paying a premium for political mandates that pushed grids to build multiple layers of intermittent generation and backup to replace the electricity of one unit of reliable generation. Now they are being asked to pay again for the transmission needed to support that spending.
If politicians want to stop the bleeding, the answer isn’t spending to hide the distortions created by past errant policy. It’s restoring market discipline and letting grids build what works.
