The Next Phase Of Shrinkflation: Rolling Blackouts
Quoth the Raven
· QTR’s Fringe Finance
· July 17, 2026 at 12:07
· ⏱ 9 min read
| Read on Substack ↗
Summary
The article argues that regulatory price caps on wholesale electricity at $333/MW-day are too low to justify building new power plants, while data-center-driven demand is surging, creating a supply deficit that will lead to rolling blackouts—a form of shrinkflation where consumers pay the same for less reliability. This structural imbalance implies rising operational risk for any entity dependent on stable grid power, but the author does not make specific investment recommendations or disclose any positions.
•US electricity consumption per capita is lower today than in 1995, but data-center demand is now spiking (e.g., Softbank 5GW in France, StarGate 10GW, Facebook 5GW in Louisiana).
•Regulators have set a wholesale electricity price ceiling of about $333 per megawatt-day, which covers operating costs for existing plants but is 50% below the ~$500/MW-day level needed to incentivize new plant construction.
•The northeast grid (PJM) is already in a 6.5 GW deficit against its reserve requirement for the first time, increasing the chance of major failures next summer.
•Historical analog: the 1965 Northeast blackout (30M people affected) stemmed from scaling a fragile, interconnected grid without building resilience into the system.
•The article frames current policy as 'shrinkflation'—flat electricity prices in nominal terms but deteriorating reliability, akin to smaller product portions at the same price.