A record-breaking heatwave slammed the eastern US, sending temperatures into the triple digits.

John,

Welcome back to On the Grid, Third Way’s bi-weekly newsletter, where we’ll recap how we’re working to deploy every clean energy technology as quickly and affordably as possible. We’re excited to have you join us!

This week, a record-breaking heatwave ([link removed] ) slammed the eastern US, sending temperatures into the triple digits. As homes and businesses crank the AC to stay cool, electricity demand is soaring, and our electrical grid is struggling to keep up.

The Proof Is In The Prices: The US doesn't run on a single national grid–we rely on a patchwork of regional systems, Regional Transmission Organizations (RTOs), to balance electricity supply and demand in their own designated areas. But when demand spikes across an entire region, local supply can easily become overwhelmed, driving up prices.

We saw this play out in real time this week. Wholesale electricity prices in New York surged past $1,500/MWh, more than 30 times the state's 2024 average. ([link removed] ) In New England, prices shot up to nearly $1,200/MWh, roughly 24 times higher than usual. The Midwest saw prices jump over $500/MWh. Prices in Texas and California, however, remained low, due in large part to the massive amount of wind, solar, and battery storage ([link removed] ) capacity both states have added in the last year. When demand surged, they could meet more of their load with cheap energy, avoiding the need to dispatch expensive gas and peaker plants, and keeping market prices low.

A quick TL;DR on electricity markets: the grid uses the cheapest power first, but uses the most expensive power to set the price. So the more cheap energy you have ready to go, the less you end up paying.

Clearing the Bottlenecks: To meet growing demand, the US needs to overcome two major challenges. One, America needs more cheap, reliable, and clean energy. But the projects that would generate that electricity are stuck in the interconnection queue ([link removed] ) (95% of which are renewable projects), waiting years for permits, approvals, and infrastructure upgrades to get built. Second, the US needs to boost its ability to move that electricity where it’s most needed. But building the transmission lines to do that, especially between states, is complicated and notoriously slow.

While policymakers and regulators work on both these fronts, we don’t have to sit on our hands. From advanced grid technologies ([link removed] ) to new AI applications for grid modernization, we already have a set of tools that we can deploy to ease grid strain, improve reliability, and speed up processes like permitting and interconnection.

What We’re Doing: We’ve long been raising the alarm about the limitations of our aging grid ([link removed] ) and laying out the policies we need to overcome them. ([link removed] ) That includes expanding transmission to handle growing energy demand, as well as identifying solutions we can put to work now while we build toward longer-term infrastructure goals.

Recently, we partnered with the Federation of American Scientists to outline a set of actionable, day-one pragmatic policies to reduce delays, cut red tape, and improve overall grid performance. We contributed a memo ([link removed] ) building on a 2024 analysis from the Department of Energy ([link removed] ) , which identified several high-impact, deployment-ready applications of AI that can ease grid strain, improve reliability, and speed up processes like permitting and interconnection. Our memo expands on their analysis and maps the potential impact and feasibility of each AI use case.

AI Opportunities and Grid Modernization ([link removed] )

This week, New York Governor Kathy Hochul ([link removed] ) directed the New York Power Authority and the Department of Public Service to pursue a 1 GW advanced nuclear facility in the state. The proposed facility would generate enough power for 1 million homes, create 1,600 construction jobs and 1,200 permanent positions, and provide New York with secure and reliable baseload power for decades..

Why This Matters: The project itself is notable. It signals that New York, which has already made significant strides in the clean energy transition, is looking beyond renewables like solar and offshore wind.

But the state also shows just how pro-nuclear policy–and frustration with the obstacles slowing it down–has entered the mainstream. Governor Hochul didn't just promote nuclear. She used this week’s announcement to call out structures that slow or prohibit nuclear deployment: "There's a reason people don't embrace nuclear energy, a lot of reasons, one of them, it just takes too long. And the barriers are in Washington. The length of time, 10 years, a decade, of regulatory bureaucracy and red tape that must be gotten through. There's a reason it fails, and people don't even try.

From Fringe to the Forefront: Third Way has spent over a decade pushing to expand federal support ([link removed] ) , onshore critical supply chains ([link removed] ) , and streamline burdensome regulatory processes ([link removed] ) . For the majority of that time, nuclear has remained in the periphery. Important, but too technical for anyone outside of Washington, and burdened with unique political challenges. Today, that posture is shifting. Public support for nuclear is already at a near-record high ([link removed] ) , and new projects are coming together daily. Awareness of and demand for nuclear is high, so much so that a sitting governor is offering wonky critiques of excess red tape and asking for federal intervention to cut through overly complicated nuclear regulations. It’s also an important harbinger of shifting Democratic attitudes: less NIMBYism, more building, more energy, and more open criticism of government when it’s not quite working as it should. It’s a welcome change.

Regular readers know energy demand is growing, driven by AI, industrial growth, and rapid electrification. Our current infrastructure can’t keep up. If the US wants to meet growing demand and keep prices low for consumers, it needs to use every tool at its disposal. And right now, that includes natural gas

Why Natural Gas Still Matters: At home, natural gas powers over 40% of US electricity generation ([link removed] ) . Abroad, American liquified natural gas (LNG) is an essential lifeline for allies ([link removed] ) that are rapidly shifting away from Russian fossil fuels. Until the US builds out firm, baseload clean energy at scale, LNG will remain a core part of our energy mix, and Democrats can’t pretend to think otherwise.

But acknowledging the gas’s critical role in our economy does not mean ignoring its significant drawbacks. Methane leaks and flaring in the supply chain create waste, excess pollution, and raise carbon emissions. Even controlling for leaks and flaring, burning natural gas still incurs serious greenhouse gas emissions and produces environmental pollutants that endanger human health. These are serious problems that demand serious solutions–and, at present, neither the environmental Left nor Trump’s Republican party brings substantive answers to the table.

A Better Plan for Gas: The US needs a strategy grounded in reality–one that recognizes how deeply natural gas is embedded in our economy and how critical it is to our global competitiveness. At the same time, we must manage its risks and move faster to build the clean technologies and infrastructure we’ll need in the future.

Our latest memo ([link removed] ) lays out what that balanced approach should look like, outlining key principles to help build that strategy.

As Senator Elissa Slotkin (D-MI) put it this week in her “Economic War Plan ([link removed] ) ”, we don’t need a “renewable plan or a fossil fuel plan. It’s an all-of-the-above energy plan. Natural gas, since it's not feasible to meet growing demand without it. But also other forms: Nuclear. Batteries. Renewables like wind, solar, and hydropower. New stuff that’s still in development—from fusion to biofuels. We need it all.”

- Molly Podolefsky ([link removed] ) , in Utility Drive, argues that investing in behind-the-meter flexibility–like virtual power plants and distributed energy resources–is a smart way for utilities to get around growing financial uncertainty in large-scale grid investments.
- Jael Holzman ([link removed] ) , in Heatmap, shines a light on how a green hydrogen project is driving a wedge through Wyoming’s Republican leadership.
- Lara Pierpoint and Stephen Lacey ([link removed] ) , on The Green Blueprint podcast, sit down with Rick Needham, Chief Commercial Officer at Commonwealth Fusion Systems to discuss nuclear fusion and how the company is moving to commercialize their innovative technology.

Let’s keep the conversation going,

Mary Sagatelova

Senior Advocacy Advisor | Third Way

216.394.7615 :: @MarySagatelova ([link removed] )

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