The chief executive of Exelon, the largest utility in the United States by customer count, has issued a warning that the country could experience power outages as early as next year due to increasing strain on the electrical grid. Calvin Butler highlighted the growing risk of blackouts, particularly in the northeast and Midwest regions, where power plant shortages are becoming critical.

Butler noted that last winter’s extreme cold nearly forced service interruptions for approximately 400,000 customers and emphasized that the situation is deteriorating. The intensifying demand on the grid is partly attributed to the rapid expansion of artificial intelligence (AI) technology, which has driven substantial increases in electricity consumption.

Forecasts indicate U.S. electricity demand could rise by nearly 40 percent by 2035, according to consultancy ICF. PJM Interconnection, an electricity grid operator covering the northeast and Midwest, has projected a potential shortfall of 60 gigawatts over the coming decade. Its most recent capacity auction showed a deficit of 6.5 gigawatts, underscoring the growing challenges facing the region’s power supply.

Electricity prices have already escalated nationally by 7 percent over the past year, with sharper increases in some states served by Exelon: 17 percent in New Jersey, 16 percent in Maryland, and 13 percent in Pennsylvania. These price hikes reflect a combination of rising electricity demand, volatile natural gas prices, and the costly need to upgrade aging and weather-affected infrastructure.

Exelon, which serves nearly 11 million customers through six utility subsidiaries including ComEd in Chicago, BGE in Maryland, and PECO in Pennsylvania, has sought to raise rates to cover these escalating costs. However, such efforts have met political resistance. Several states, including New Jersey, New York, and Maryland, have enacted legislation to more closely scrutinize utility rate increases and provide financial relief to consumers.

Butler criticized AI data center operators for being underprepared for the backlash over electricity consumption, suggesting utilities have unfairly become scapegoats for rising costs. In Pennsylvania, for example, Exelon’s subsidiary PECO withdrew a proposal to increase typical electric and gas bills by $35 monthly following strong criticism from Governor Josh Shapiro, who condemned the company’s $814 million profit as “obscene” and accused it of attempting to raise prices out of greed.

While Butler apologized to the governor for the company's failure to clearly communicate the necessity of the rate increase, he stressed that deferring such adjustments would only postpone inevitable costs. He argued that maintaining a robust, reliable power system requires investment aligned with economic growth.

Exelon announced an increase of $400 million to its projected capital expenditures over the next four years, underscoring the financial commitment needed to modernize the grid. Butler also pointed to regulatory constraints limiting utility ownership of power plants in PJM states, a legacy framework designed to promote competition by separating transmission from generation.

Butler contended that independent power producers lack sufficient incentive to develop new generation facilities, which can take decades to become profitable, and advocated for allowing utilities to own and operate such plants. Legislative efforts in Maryland to expand ownership rights have stalled, though Butler expressed cautious optimism about similar proposals in New Jersey and Delaware.

Despite these challenges, Butler emphasized a need for state lawmakers to acknowledge the severity of the looming power shortfall. “Change is hard, and legislators really do well in crisis. But right now they don’t perceive it as a crisis,” he said, signaling concern over preparedness for the nation’s energy future amid the AI-driven demand surge.