Chantilly, Virginia, USA – September 21, 2022: An electric power transfer station sits alongside a rural road in western Fairfax County on a bright afternoon.
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America’s electricity system is evolving fast. Demand is climbing, capital is flowing, and independent power producers (IPPs) are responding to market signals that are designed to spur new supply. Much of the recent debate about the grid focuses on the urgent need for more generating capacity. Yet as investment accelerates and interconnection and permitting queues stretch longer, the conversation must shift to whether the rest of the system—transmission and distribution—can support the new plants as they come online.
Power Generation, Transmission, Delivery Must Expand Apace
Generating electricity and delivering it are two sides of the same equation. While generation projects can be built relatively quickly, they become bottlenecks unless transmission and distribution networks expand at the same speed. All parts of the power‑delivery chain must move forward together to avoid choking off the benefits of new capacity.
In the PJM interconnection, which spans the eastern seaboard from North Carolina to Pennsylvania and westward into Illinois, the tension between supply and delivery is especially visible. By the end of April, more than 800 generation projects totaling over 220 GW of proposed capacity had filed to connect to the grid. Not every project will reach completion, but the sheer volume of applications shows that developers and investors see real opportunity and are acting on it.
IPPs are also looking to boost the output of existing plants, a strategy that can add megawatts faster and make the most of current facilities. While these upgrades rarely grab headlines, they highlight a core strength of competitive markets: when conditions shift, capital quickly follows and supply is brought online.
Permitting, Litigation Cause Chronic Delays
Transmission and distribution assets do not appear overnight. Demand for grid equipment has surged, stretching lead times for critical components. Lengthy permitting processes at all government levels and relentless litigation keep the sector from moving at the pace needed, despite reform efforts. Costs have risen, often outpacing inflation.
Over the past two decades, real transmission‑and‑distribution spending has increased while generation spending has fallen, according to the Lawrence Berkeley National Laboratory. The utility industry, however, cites roughly $1.4 trillion in grid upgrades over the last decade and forecasts $1.1 trillion in investments through 2029.
Customers naturally want to see results from these outlays. Yet as pressures mount, utility leaders—such as Exelon’s Calvin Butler—continue to stress the need for more generation and to seek guaranteed returns in the business.
“But if we want to meaningfully lower energy bills across the country,” Exelon President and CEO Calvin Butler writes in a guest op/ed at Fox News, “we don’t need a less capable grid; we need to start with a simple, commonsense solution: produce more electricity and do it faster.”
The central question now is whether the grid will be ready to move the power where it’s needed. If independent producers in competitive markets are already preparing new supply, arguments that focus solely on building more generation without addressing transmission and distribution bottlenecks risk being diversionary. A meaningful solution must include an acknowledgment that delays in transmission and distribution are emerging as major constraints across PJM and other regional grids.
Competition Delivers Value Across Regional Grids
The era of regulated, utility‑dominated generation is largely behind us. Calls to return to a more bureaucratic, less competitive system appear out of step with current realities. When grids remain constrained, equipment shortages persist, and readiness concerns grow, weakening competition is unlikely to help. Utilities would serve the public better by demonstrating how future spending in their own sectors can yield stronger outcomes.
This focus becomes even more critical as data‑center development accelerates and utilities intensify efforts to shield customers from rising costs. Protecting ratepayers begins with efficient infrastructure management and delivering the investments already underway. It should not be used as justification for eroding the competitive mechanisms that continue to drive new power‑supply investments.
U.S. history shows that competition drives efficiency, attracts capital, and produces measurable benefits for consumers. PJM alone generates roughly $5 billion in annual savings because market participants compete to supply electricity at lower cost. Allowing utilities to re‑enter generation while securing guaranteed returns inside competitive markets could produce the worst of both worlds: reduced competition, weaker cost discipline, and higher exposure for customers.
The power sector’s challenge is shifting from whether new generation will be built to whether utilities can deliver that power efficiently, affordably, and at the speed the market demands. This is true not only in PJM but across the nation’s regional grids. Investment is pouring into generation; utilities now must prove they can get the electricity from the plant to the end‑user without unnecessary delay.