The Alarm Bell Everyone's Talking About

The North American Electric Reliability Corporation (NERC) just dropped a bombshell: more than half of North America faces energy shortfall risks in the next 5-10 years. Summer demand is forecast to surge by 122 GW; a 15.7% jump that has grid operators sounding alarm bells from coast to coast.

After 40 years in this business and countless utility rate case battles, I've learned to read between the lines when reliability warnings hit the headlines. Yes, the grid challenges are real. But what NERC isn't telling you is how utilities will use this crisis to justify massive rate hikes that hammer businesses while protecting their own profits.

What's Really Driving This "Explosive" Demand Growth

NERC points to three main culprits behind the demand surge:

Data Centers: The digital economy's appetite for electricity is insatiable. Every new AI application, cloud service, and digital transaction requires power—massive amounts of it.

Electrification: Heat pumps, electric vehicles, and industrial processes are all shifting from fossil fuels to electricity, creating new peak demand challenges.

Industrial Growth: Manufacturing facilities, hydrogen plants, and other energy-intensive operations are coming online across the continent.

Here's what NERC won't tell you: utilities love this narrative because it gives them cover for the rate increases they were planning anyway.

The Real Problem: Utilities Playing Both Sides

From my experience fighting NIPSCO and other utilities in rate cases, I can tell you exactly what's happening here. Utilities are caught in a classic squeeze play of their own making:

They're retiring baseload generation too fast. Coal and nuclear plants that provided reliable, around-the-clock power are being shuttered before adequate replacement capacity comes online.

They're over promising on renewables. Wind and solar are great, but they can't provide the same reliability as the baseload units being retired. When the wind doesn't blow and the sun doesn't shine, somebody still needs to keep the lights on.

They're under-investing in transmission. The infrastructure needed to move renewable power from where it's generated to where it's needed isn't being built fast enough.

The result? A manufactured crisis that utilities will use to justify massive infrastructure spending and the rate hikes to pay for it.

The MISO Reality Check

The report initially tagged the Midcontinent Independent System Operator (MISO) which covers much of Indiana, as facing "high risk" of energy shortfalls starting next year. But here's the kicker: NERC had to issue a correction in June 2025, admitting MISO "submitted mismatched data, which overstated the near-term energy shortfall risk."

This kind of data error isn't just embarrassing, it's dangerous. When reliability organizations publish inflated risk assessments, utilities use them as ammunition in rate cases to justify emergency spending measures that bypass normal regulatory scrutiny.

What This Means for Northern Indiana Businesses

Based on my experience in IURC proceedings and specifically with NIPSCO rate cases, here's what northern Indiana businesses should expect:

NIPSCO Will Double Down: Fresh off their 26% rate increase, NIPSCO will likely point to NERC's warnings to justify additional infrastructure spending. They've already cited "aging infrastructure" needs and reliability concerns give them even more ammunition.

Higher Infrastructure Charges: Utilities will point to NERC's warnings to justify accelerated infrastructure spending. For NIPSCO customers already paying $50+ more per month, these delivery charges could climb even higher.

Capacity Market Premiums: MISO's capacity auction results directly impact northern Indiana electric bills. Grid reliability concerns will likely drive capacity prices higher.

Emergency Rate Mechanisms: Expect NIPSCO to request special rate authorities that allow them to recover "grid reliability investments" without full IURC review which is similar to the mechanisms they've used for other infrastructure projects.

Data Center Cost Shifts: As new data centers locate in northern Indiana to serve Chicago-area demand, NIPSCO may try to spread those infrastructure costs across existing customers rather than making the data centers pay their fair share.

The Questions Regulators Won't Ask

Having testified in multiple IURC cases, I know the questions that need to be asked but rarely are:

Why weren't these demand projections included in your last rate case? If utilities knew this growth was coming, why didn't they plan for it in their integrated resource plans?

What's your plan to make demand-drivers pay their fair share? If data centers and industrial customers are driving the need for new infrastructure, they should pay for it directly and not through socialized costs.

How do we know this spending is actually needed? Independent engineering reviews of utility infrastructure plans often find significant padding and gold-plating that regulators never see.

What alternatives to new construction have you considered? Demand response, energy efficiency, and load management can often address reliability concerns at a fraction of the cost of new generation and transmission.

The Fair Rates Alliance Response

This is exactly why we founded the Fair Rates Alliance. When reliability crises hit the headlines, utilities start writing blank checks and businesses get stuck with the bill.

Our approach is different:

We audit the claims. Not all infrastructure spending is necessary, and not all demand projections are accurate. We dig into the engineering studies and financial models to separate legitimate needs from utility wish lists.

We fight cost allocation. New demand should be paid for by those creating it, not spread across all customers. Large industrial users and data centers should pay their own way.

We demand alternatives analysis. Before approving new multi-billion-dollar infrastructure projects, regulators should require utilities to prove they've exhausted lower-cost options.

What Businesses Can Do Right Now

Monitor rate case filings: When utilities start referencing NERC's reliability warnings in rate cases, that's your cue to pay attention. These references often precede requests for massive infrastructure spending.

Demand detailed cost-benefit analysis: Any infrastructure project justified by reliability concerns should be subject to rigorous economic analysis. Make sure regulators require utilities to prove the spending is cost-effective.

Consider collective action: Individual businesses have limited power to influence utility spending decisions. But united voices carry weight in regulatory proceedings.

Plan for higher costs: While we'll fight to minimize unjustified rate hikes, some infrastructure investment is genuinely needed. Budget accordingly.

The Bottom Line

NERC's reliability warning is real, but it's not the whole story. The grid does face challenges, and some infrastructure investment is necessary. But in my four decades of fighting these battles, I've learned that utilities never let a good crisis go to waste.

The question isn't whether we'll see rate increases. We know we will. The question is whether those increases will be justified by actual need or padded with utility wish-list items that have nothing to do with grid reliability.

That's where regulatory oversight and business advocacy become crucial. Without watchdogs questioning utility claims and demanding proof of necessity, "reliability" becomes a blank check written by ratepayers.

We've saved millions for Indiana businesses by asking the hard questions utilities don't want to answer. As this reliability crisis unfolds, those questions become more important than ever.

Read More at: https://www.utilitydive.com/news/explosive-demand-growth-blackouts-NERC-LTRA-reliability/735866/

Jonathan Burke is Co-Founder of the Fair Rates Alliance and has over 40 years of experience in energy management and utility regulation. He has testified as an expert witness in major IURC cases and personally delivered over $17 million in verified energy savings for public entities. For more information about protecting your business from unjustified rate hikes, visit www.fairratesalliance.com.