What Happens When America's Power Grid Becomes a Last Resort?

Good news. Electric grid reliability was a lot better in 2025 than in 2024. But one swallow does not make a spring, as Aristotle noted, a number of years ago. Grid reliability, we believe, has been trending downward since the turn of the century, that is, since deregulation really got rolling. Okay, you could argue, as a good logician, that this is an example of a post hoc ergo propter hoc fallacy, that is, because event B took place after event A must mean that A caused B.

We admit that. We're just pointing out the chronology, before applying a few lessons from Wall Street. First, to the numbers graphed below. The blue line is based on outage numbers issued by the Energy Information Administration, a series that ended in 2023. Note the upward trend. The green line shows outage minutes per average customer, as calculated by the Institute of Electrical and Electronics Engineers IEEE.

It shows a wide-ranging variability from year to year, but on an upward trend. The grey line, trending upward slightly but relatively smooth, shows average outages after excluding Major Event Days; in other words, reliability when there is nothing big going on to affect reliability. Let's consider these numbers from a Wall Street perspective. First, the reliability number excluding Major Event Days looks suspiciously like "adjusted earnings", the procedure whereby management removes unusual and supposedly one-time items from the income statement they report to Wall Street.

They have to report those items in the audited statements, but they like to divert attention to the adjusted numbers. "Hey, this is a one-time event; it won't happen again, so ignore it." Instead, something else happens next year, and on and on. We could say the same about hurricanes. Each one is a unique event, but they keep recurring.