A heat wave threatens to overwhelm U.S. power grids this week. Americans may need to adjust their July 4 travel plans. The revelation that running every AC unit at full blast while the sun beats down requires electricity has caught grid operators off guard.
Utilities spent decades building infrastructure designed to deliver power. They forgot to account for people actually using it. The math was simple until everyone wanted electricity at the same time.
July 4 ranks as one of the busiest travel weeks. Millions of people will sit in traffic with their AC cranked to arctic levels while texting their broker about energy stocks they don't understand. The grid will buckle. The irony will be lost on everyone involved.
Some areas may face rolling blackouts. Residents will post angry tweets about how nobody warned them. The warnings will be in their inbox, unread, filed next to their utility company's conservation requests and that Robinhood margin call they've been ignoring.
Power companies will issue statements about unexpected demand. As if summer heat in July represents some kind of black swan event. As if the same thing didn't happen last year and the year before that.
The solution requires either using less power or generating more. Americans will choose neither. They'll blame the grid, the government, solar panels, coal plants, and whoever their preferred cable news network tells them to blame. Then they'll crank the thermostat down another two degrees.
Travel plans will change. Families will reschedule their trips to slightly cooler days when the grid can handle their ring light and Tesla charger running simultaneously. The market will not care. Your portfolio will not care. The heat will break eventually and everyone will forget this happened until next summer.
But sure, keep checking your energy sector ETF every four minutes like you're managing a pension fund instead of three shares you bought with grocery money.
Photo by Documerica on Unsplash
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