Report: 75% of Utilities Face 'Higher Operational Risk' Amid Rise in AI Data Center Load Growth
Utilities across North America are facing a tougher operating environment as gaps widen between their desired grid resiliency and the present financial realities shaping how quickly they can achieve those goals.
According to a recent study by research agency Zpryme, 75% of surveyed North American utilities reported higher operational risk today compared to five years ago. The Texas-based firm highlighted in its 2026 State of Grid Resilience report that three in four respondents directly link this shift to the rapid growth of data centers and artificial intelligence.
Out of the 141 utility and energy industry professionals surveyed, 61% viewed affordability and customer rate pressure as the single most significant barrier to accelerating grid resiliency investments.
Despite these financial concerns, nearly 80% of the utilities surveyed on behalf of global electric power equipment provider S&C Electric Company expect resilience-related investments to increase over the next five years. Respondents represent utilities ranging from those serving fewer than 50,000 customer accounts to those serving more than 1 million across the U.S. and Canada.
Zpryme and S&C Electric Company teamed up for the report to examine resilience measures that can help improve operating conditions and mitigate risk to support future load growth. The research firm highlighted three main areas where utilities can respond to the market and address these bottlenecks.
“The research shows that utilities are being asked to strengthen grid resilience in an increasingly challenging operating environment,” said Anders Sjoelin, president and CEO of S&C Electric Company, in a statement. “Operational risk is rising, with electricity dependence and demand growing and affordability remains a significant constraint.”
Sjoelin added that these research findings aim to help reinforce the importance of prioritizing investments that deliver the greatest impact for customers, particularly on the distribution grid.
One of those areas pertains to a “measurement gap” between reliability and resilience, which could influence investment decisions. Only 48% of the utilities surveyed agree that their current methods for measuring power grid reliability accurately reflect how well they perform during major disruptions from severe weather events or grid failures.
Another gap highlighted centers around affordability. Nearly 60% of respondents stated most customer-impacted outages originate from the distribution grid, yet only 12% of utilities have fully deployed advanced self-healing distribution automation technologies such as fault location, isolation and service restoration (FLISR).
According to the U.S. Department of Energy (DOE), FLISR adoption, which promptly detects power outages through grid integrative technology, can cut both customers affected and customer minutes of interruption by half during an outage event. However, S&C Electric's recent survey found that more than half of utilities (52%) pointed to capital cost as the biggest barrier to its broader deployment.
The final area ties into investment toward load growth, which is putting additional pressure on grid systems. A little over 80% of utilities expect data centers and artificial intelligence to be a leading driver of this load growth across the grid, but only 54% expect this projected growth to be “very or extremely” significant for their specific systems over the next decade.
To address these gaps, Zpryme noted that utilities should measure what customers actually experience during major disruptions. Reliability metrics outlining restoration times and customers affected during major events remain essential for day-to-day tracking to capture the value of investments during such crises.
Through these documented customer experiences, Zpryme added that investment linked to resilience becomes easier to present to regulators and customers for key decisions.
By improving how these events are tracked, utilities can further limit how many customers are ultimately impacted during these types of outages. The full report further explains how targeted data collection can result in better grid hardening and automation, helping utilities shorten outages while also planning for load growth and resilience.
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Eric Moody