Winter Grid Reliability at Risk Amid Surging Electricity Demand and Fuel Challenges

The North American Electric Reliability Corporation (NERC) has released its 2025–2026 Winter Reliability Assessment, issuing a warning that large swaths of the United States could face electricity shortfalls during prolonged cold snaps. Although normal winter peak demand may be met, extreme cold conditions—especially those spanning multiple states—could outpace available energy supplies and strain grid reliability.

This scenario is of critical relevance to insurance claims professionals. A combination of elevated electricity demand (up 20 GW from last year), increased reliance on single-fuel natural gas generators, and uneven adoption of cold-weather protections across the energy sector means claims adjusters could see a spike in property and business interruption claims tied to winter blackouts. Several key regions, including Texas (ERCOT), parts of the Southeast (SERC), and areas in the Western Interconnection (WECC), are flagged as vulnerable under extreme winter conditions.

Natural gas remains the cornerstone of winter electricity generation, yet infrastructure limitations, voluntary freeze protection protocols, and coordination gaps between electric and gas sectors elevate the risk of fuel shortages—particularly during holiday weekends when procurement lead times are compressed.

Adjusters should note the increasing complexity of energy supply systems, which now rely more heavily on batteries and demand response tools. These assets are less dependable during multi-day events, especially when solar and wind production plummets and battery systems cannot recharge.

In the event of energy emergencies, NERC outlines contingency plans that include load curtailment, emergency fuel coordination, and state-level appeals for conservation. However, these are last-resort measures. Given the escalating frequency and severity of winter storms (Elliott, Uri), and evidence that system upgrades have yet to fully resolve previous vulnerabilities, the probability of wide-area blackouts remains a material concern this season.

Claims professionals should prepare for increased exposure to both residential and commercial losses from heating system failures, frozen pipes, and operational disruptions due to power outages. Close coordination with utility response plans and regional alerts will be essential to accurately assessing and adjusting claims in real time.