Bank of America Warns 30% to 46% of U.S. Grid Beyond Useful Life Risking System Failures

Bank of America has issued a stark warning about the deteriorating condition of America’s electrical grid, highlighting a crisis driven by aging infrastructure, rising energy demands, and a growing geographic imbalance between power production and consumption [1]. According to the firm’s analysis, 30% of transmission lines and 46% of distribution infrastructure have surpassed their useful life, significantly increasing the risk of outages and systemic dysfunction. The report underscores the urgent need for modernization and expansion to avoid a cascading failure in the system that powers the nation’s homes, hospitals, and emerging technologies.

The financial burden of maintaining the grid has shifted dramatically, with 67% of the $63 billion in 2024 utility spending directed toward replacement and repair rather than expansion. This indicates that utilities are now primarily focused on maintaining the status quo, rather than preparing for the exponential growth in demand [1]. The report estimates that U.S. electricity consumption will grow at an annual rate of 2.5% through 2035—far outpacing the 0.5% growth rate of the previous decade [1].

Multiple factors are fueling this surge in demand. Electrification of buildings, particularly in states like California and Massachusetts, is increasing residential electricity consumption as gas heating is phased out. Simultaneously, the rapid expansion of data centers—driven by AI development—has created new “super-consumers.” BofA projects data centers could consume 15%-23% of the nation’s electricity by 2030, up from 2% today [1]. Meanwhile, the resurgence of domestic manufacturing and the adoption of electric vehicles (EVs) are compounding the strain. EVs, already accounting for 9.7% of new vehicle sales in 2024, are expected to reach 22 million on the road by 2030. Their charging needs, especially in residential areas with limited infrastructure, will require substantial upgrades to the grid [1].

The geographic imbalance between where energy is produced and where it is consumed adds another layer of complexity. Most renewable energy generation is concentrated in the Southwest, Texas, and California, while major consumption hubs are on the East Coast. This mismatch places immense pressure on long-distance transmission lines, many of which are aging and failing to keep pace with demand [1]. The Department of Energy has warned that transmission capacity must grow by 64% by 2040 to support even moderate load forecasts [1].

The consequences of inaction are already visible. Transmission failures have increased, and grid reliability has declined since the early 2000s, according to data from the North American Electric Reliability Corporation (NERC) [1]. California offers a cautionary example: over the past seven years, electricity prices in the state have risen 68%, nearly doubling the national average. This surge has led to a 5% drop in demand, illustrating how price volatility and reliability issues can impact energy consumption [1].

Policy responses are emerging, but they remain fragmented. President Trump declared a national energy emergency on his first day in office, aiming to fast-track infrastructure permitting and expand traditional energy projects. Conversely, the Biden administration’s Grid Deployment Office has allocated $14.5 billion in grants since 2023, supported by $36.9 billion in private investment [1]. However, BofA warns that without a unified, aggressive strategy, the grid will continue to deteriorate, leading to more frequent outages and a growing disparity between power-producing regions and high-demand areas.

The report concludes that a “gigawatt-scale” transformation is necessary, involving not only the expansion of transmission and distribution systems but also the integration of advanced technologies like AI to optimize grid performance. Until such efforts are undertaken, the U.S. grid remains at a critical inflection point—one that could either lead to a resilient energy future or to a system increasingly unable to meet the nation’s needs [1].

Source: [1] More outages, aging infrastructure, and a bicoastal dysfunction: BofA warns America’s grid is 30%-46% ‘beyond its useful life’ (https://fortune.com/2025/08/15/how-bad-power-outages-grid-infrastructure-decline-ai-data-centers/)