AI Boom Strains U.S. Grid, Forcing Revival of Aging, Polluting 'Peaker' Plants December 28, 2025 The explosive growth of artificial intelligence is placing unprecedented strain on America's power infrastructure, triggering a consequential shift in energy strategy. To avert potential blackouts and meet soaring electricity demand from data centers, grid operators and power companies are increasingly relying on aging, fossil-fueled "peaker" plants—units once slated for retirement. This trend highlights a critical tension between the urgent need for reliable power and environmental and public health goals, particularly in the communities where these plants are often located. In Chicago's Pilsen neighborhood, the rarely used, oil-fired Fisk Generating Station, owned by Houston-based NRG Energy, is a prime example. Scheduled for retirement next year, the plant's fate reversed as electricity prices in the PJM Interconnection—the nation's largest power market covering 13 states—soared. Requests from data centers began to outstrip existing supply, making the continued operation of Fisk and plants like it suddenly profitable. Matt Pistner, NRG's senior vice president of generation, confirmed the economic rationale, stating, "We believe there's an economic case to keep them around, so we withdrew the retirement notice." A Reuters analysis of regulatory filings reveals the scale of this reversal. Within PJM, approximately 60% of oil, gas, and coal plants scheduled for retirement this year postponed or cancelled those plans, with most being peaker units. These plants, designed to operate in short bursts during peak demand, act as a grid safety net but are often decades old, lack modern pollution controls, and emit more pollutants per unit of electricity. Their revival is being accelerated under a federal push to tap all existing power sources to meet new demand quickly. U.S. Energy Secretary Chris Wright noted in a September interview, "The biggest targets are spare capacity on the grid today." The environmental and equity implications are significant. According to a U.S. Government Accountability Office (GAO) report, while peakers contribute about 3% of the nation's power, they hold a total capacity of 19%. Tapping into this spare capacity often means increased emissions in communities already bearing a disproportionate pollution burden. Research indicates the country's roughly 1,000 peaker plants are disproportionately sited in low-income and minority communities. A 2022 study led by UCLA professor Lara Cushing found that residents in historically "redlined" neighborhoods were 53% more likely to have had a peaker plant built nearby since 2000 than those in non-redlined areas. The immediate economic drivers are powerful. Prices paid to power suppliers in PJM to ensure plants run during demand spikes soared by more than 800% this summer compared to a year earlier. PJM spokesperson Jeff Shields framed the challenge starkly: "We cannot afford to lose the existing generation while we continue to bring on new generation to keep pace with the electricity needs of data centers and other large loads." Industry defenders argue these plants are an essential, reliable safeguard. NRG's Pistner called them "the last line of defense, and the shock absorber, for the system," noting their on-site fuel storage provides certainty when other sources fail. However, energy experts point to alternatives like investing in more robust long-distance transmission lines and advancing battery storage technology. Frank Rusco, a GAO director, suggested that improving grid efficiency "would probably have a reduction in the amount of reliance on peakers." For communities like Pilsen, the extended operation of plants like Fisk represents a setback. Following a successful fight to shut down a coal plant on the same site over a decade ago, residents now face continued emissions from the oil-fired peakers. Local advocate Jerry Mead-Lucero worries about compounding environmental hazards, stating, "You add all of these compounding factors, and you end up with a real problem again." As the AI-driven demand surge shows no signs of abating, the nation's pursuit of technological supremacy is forcing a difficult reckoning with its aging energy infrastructure and its environmental legacy. Source: dailysabah
AI Boom Strains U.S. Grid, Forcing Revival of Aging, Polluting 'Peaker' Plants
