Utility boss warns U.S. could face blackouts as power supply shortfall grows

Exelon CEO Calvin Butler warned in a Financial Times interview published June 27 that the U.S. could face blackouts as soon as 2027 if power supply does not keep up with rising demand, especially from AI data centers.

Butler said the tightest pressure is in the Northeast and Midwest, where he said the grid came very close this past winter to needing curtailments for about 400,000 customers on cold days. He described the problem as a widening mismatch between load growth and the pace of new generation and grid investment.

The warning adds to growing concern that the rapid buildout of data centers is arriving faster than utilities and grid operators can expand supply. Butler said the risk is not just higher prices, but a reliability problem if capacity additions lag further.

A shortfall building over time

The FT report said PJM has projected a 60-gigawatt power supply shortfall over the next decade. It also said U.S. electricity demand is expected to rise 39% by 2035, citing ICF.

That outlook matters because PJM covers much of the Northeast and Midwest, where Butler said the system is already under strain. The warning suggests that the challenge is not confined to a single utility or state, but reflects a broader regional supply crunch.

Butler linked the concern directly to rising demand from AI data centers. Those facilities can add large, concentrated loads to power systems that were not built for this kind of growth, especially when new generation projects face long timelines.

Rate pressure and politics

The supply gap is also feeding a fight over who pays for the infrastructure needed to serve new demand. Exelon subsidiary PECO withdrew a proposed $35-a-month bill increase for 2027 after criticism from Pennsylvania Gov. Josh Shapiro, according to the FT report.

Butler argued that utilities are being scapegoated for higher bills and said the grid needs major investment. His comments point to a larger political battle over rate hikes, cost allocation, and whether large new users should shoulder more of the expense.

The debate is likely to intensify as utilities seek to fund generation, transmission, and other upgrades needed to support both current customers and new industrial load. For households, the immediate concern is higher electricity bills; for policymakers, it is how to balance affordability against reliability.

Wider industry warnings

Butler’s remarks are consistent with other recent warnings about the strain from data-center growth. A May report summarized by Business Insider said the North American Electric Reliability Corporation issued its highest-level alert on data centers, warning that they could threaten grid stability and asking affected entities for mitigation plans by August 3.

A separate May report summarized by Tom’s Hardware said Monitoring Analytics blamed data centers for a major PJM electricity-price spike and urged changes to cost allocation. Together, those reports show that the issue has moved beyond a narrow utility dispute and into a broader argument over market design and grid planning.

Another open question is how much of the projected shortfall is tied specifically to AI data centers versus broader electrification and load growth. The FT report and related background point to AI as a major driver, but the reliability challenge is clearly larger than any single customer class.

What comes next

The next developments to watch are responses from Exelon, PJM, NERC, and state regulators. Any new comments, filings, or policy proposals could clarify whether the warning is being treated as a near-term planning problem or a more immediate reliability threat.

It will also matter whether other utilities or grid operators issue similar warnings. If they do, pressure will grow on regulators to decide whether utilities should be allowed to own more generation themselves or rely mainly on independent power producers to add capacity.

For now, Butler’s message is forward-looking rather than a report of an immediate blackout. But it underlines a central risk in the AI buildout era: if new supply does not arrive fast enough, the debate over higher bills could turn into a broader reliability crisis.