Aging U.S. Grid Spurs $1.4T Upgrade, ALPS ETF Targets Builders

Speakers at a July 27 webinar hosted by SS&C ALPS Advisors warned that the U.S. power grid faces faster demand growth and large spending needs, and presented the ALPS Electrification Infrastructure ETF (ELFY) as a way to invest in companies that build and maintain the system.

The event was moderated by Roxanna Islam of VettaFi. Paul Baiocchi, head of fund sales and strategy at SS&C ALPS Advisors, said electricity demand grew by less than 0.5% annually over the past 25 to 30 years but is projected to rise to about 7% by 2027 and remain above 3% a year into the next decade. Mark McLain, managing director and head of power and energy at Ladenburg Thalmann, attributed part of the change to new technologies such as AI data centers and robotics increasing continuous power needs.

Panelists highlighted uneven regional pressure on the grid. McLain pointed to Virginia, where data centers and new factories are driving a forecasted 7% to 9% demand increase through 2030, and to Texas, where load growth is approaching 10%. He cited NextEra Energy’s pending acquisition of Dominion Energy’s Virginia utility as an example of larger utilities positioning for higher local demand.

The presenters described physical stresses on transmission and distribution infrastructure. About 70% of U.S. transmission lines are more than 25 years old, according to McLain. The country spent roughly $1.4 trillion on grid upgrades over the past decade and is on pace for another $1.4 trillion by 2030. McLain estimated transmission and distribution spending reached $105 billion in 2025 and could rise to $140 billion to $150 billion in 2026.

Policy drivers were also discussed. Thirty-two states have clean energy mandates, which the panel said will require about 100 gigawatts of additional renewable capacity by 2030 and about 360 gigawatts by 2050. Changes in procurement rules under the Inflation Reduction Act that require 40% to 50% domestic sourcing of some renewable project materials were described as encouraging factory construction and onshoring of component production. Panelists noted natural gas accounted for about 42% of U.S. power generation, keeping pipelines, turbines and storage central to the transition.

ELFY was presented as a fund built around companies that deliver electricity rather than those that primarily consume it. The ETF holds roughly 105 to 110 equally weighted positions across regulated utilities, independent power producers, specialty contractors and electrical equipment manufacturers. McLain said the portfolio includes midstream gas firms, copper producers and turbine makers such as GE Vernova.

Baiocchi outlined how financial advisers might use ELFY. He suggested pairing the ETF with materials-focused funds for broader commodity exposure or with energy infrastructure names for income-oriented clients. He also noted that energy represents less than 5% of the S&P 500 by weight and that only four midstream companies are in that index, reflecting limited passive exposure to firms that build and maintain the grid.

VettaFi is the index administrator and calculation agent for ELFY and receives a fee for that work. The webinar materials stated that ELFY is not issued, sponsored, endorsed or sold by VettaFi and that the firm has no obligation or liability related to the ETF’s issuance or trading.