(FORTUNE Magazine) – As the mercury rises this summer, Jim Fitzmaurice will feel the pressure build. A 28-year veteran of Commonwealth Edison in Chicago, Fitzmaurice rose through the ranks of linemen inspecting overhead cables. Now he's in charge of keeping the power on all over the North Side of Chicago. Com Ed's aging power infrastructure failed disastrously last summer; after parts of the South Loop went dark for up to ten hours, Fitzmaurice's old boss and 34 other Com Ed employees lost their jobs. Another crisis like that, says Fitzmaurice, who goes by FITZ on his license plates and throughout the company, "and I'll be filling out my resume."

It's going to be a long, hot summer for Fitzmaurice--and the heat is not even his biggest problem. As the computer-driven new economy meets the grimy utilities of the old economy, employees like Fitzmaurice are fighting a battle on two fronts. First they have to find enough power to keep up with demand. Then they must make sure that the transmission systems of aging plants can carry it.

The battlefield's ground zero is in data centers where thousands of servers and other powerful computers are stacked floor to ceiling. Com Ed says the typical data center in Chicago requires ten times the power of a conventional office building. To put it another way, a single data center will use as much electricity as six 40-story office buildings. Roughly 20 data centers are currently planned for the Chicago area. If they reach full capacity, their annual power consumption will almost equal the output of a small nuclear reactor.

Across the country, electricity usage is expected to be at record levels this summer, spurred by the growth of the Internet and its attendant power needs. Although the deregulation reshaping the utility industry has exacerbated the problems of supply and demand, the real culprit is straightforward: too few plants and too many power-hungry customers. The last big utility power plant in California opened in the mid-1980s, back when today's Internet millionaires were in junior high. Not many people are clamoring to have new transmission lines--which are critical for carrying electricity to gentrified urban neighborhoods and booming exurbs--cross through their backyards.

The brownouts have already begun. In June, Pacific Gas & Electric cut power to just under 100,000 San Francisco-area customers when managers of California's power system warned the utility that the Bay Area's power grid was near collapse. "We projected that peak demand in the Bay Area this summer would total 8,900 to 9,000 megawatts," says Jim Detmers, managing director for operations of the California ISO, which runs the state's power network. "We hit 9,100 megawatts last month. It's cooled down since then, but I have nightmares about what will happen when it gets hot all over the West Coast."

New Yorkers also had brownouts in June, when cables supplying Manhattan's tony Upper East Side gave out. In the Deep South, where air conditioning is a way of life and temperatures can reach the 90s in April, utility executives face surging power demand. Atlanta's Southern Co., which serves Georgia and three nearby states, is spending more than $1 billion annually on capital improvements; Southern's chairman, Bill Dahlberg, expects that figure to move higher during the next few years.

Across the U.S., the high-tech industry is now the single-largest source of new demand for electricity, according to Mark Mills, co-editor of the Massachusetts-based Digital Power Report. He estimates that new-economy sectors--computers, semiconductors, telecom, information storage, and Internet-oriented companies--account for 12% to 14% of the country's power consumption. "That's more than the steel and paper industries combined," Mills says.

Nowhere is this trend more evident than in the data centers. Whether they're called "server farms" or "telecommunications hotels," these centers are critical to the new economy. And they require enormous amounts of power, both to operate the high-tech hardware and to cool the computer rooms to near 70 degrees. The centers also require a supply of electricity many times more consistent than the power sent to conventional customers. The tiny blips that cause lights to flicker at home can devastate high-performance Internet servers.

Digital Age customers would be shocked if they saw the aging network of cables that carry their juice. It's not unusual for Com Ed employees working in manholes underneath the Loop to find newspapers that date from the 1930s, the era of Al Capone and Eliot Ness. And while Com Ed officials point out that old power lines can function for decades if properly maintained, the system simply wasn't designed to carry the loads that the Internet era requires. In many places in the Loop, crucial data like transformer temperatures are still recorded with ink on paper rolls. It's a bit like trying to power a computer with vacuum tubes.

After last summer's outages and the ensuing outrage, Com Ed embarked on a huge effort to upgrade its infrastructure and, at the same time, improve the utility's dreadful public image. John Rowe, chairman and CEO of Unicom (Com Ed's corporate parent) introduced a kind of glasnost on Lake Michigan, freely admitting the company's past sins and apologizing repeatedly for its hapless performance in 1999. "Last summer was totally miserable," says the 55-year-old Rowe, who took over Com Ed in 1998 after running the New England Electric System for nine years. "My wife was ready to move back [to New England], and my building manager was worried that people would stone the building. But sometimes only the top dog can take the heat."

How did things get so bad? Part of the answer is that Com Ed executives were distracted during the 1980s and early 1990s by problems in the company's six nuclear plants. The nuclear facilities sucked time and money away from more basic needs like replacing old cables and building new substations. "People in the company got used to living with too little capital and expectations that were too low," says Rowe, who's also busy these days overseeing Unicom's merger with Philadelphia's PECO Energy.

Carl Croskey, who runs Com Ed's power distribution system, is even blunter about the utility's failings. "Management screwed it all up," says the burly, Harley-riding Croskey, whom Rowe brought in from Michigan Consolidated Gas last August after firing his predecessor. Ticking off the specifics with his stubby fingers, Croskey cites "improper maintenance, lack of individual accountability, and management neglect" at the company, adding that he had to "clean house" soon after his arrival. The firing of senior managers last summer was a shocker at a company where lifetime employment was thought of as a job benefit. "There are customers at the end of them wires," says Croskey, still fuming a year later. "We forgot that."

Besides serving up a healthy dish of crow, Croskey and Rowe are spending hundreds of millions of dollars in a frantic bid to prepare Com Ed for the demand generated by both high tech and a building boom that's transforming abandoned warehouses into power-hungry lofts and retail space. The company has earmarked $680 million for infrastructure improvements this year, more than double the amount it spent in 1995. Next year it plans to spend another $600 million.

A visit to the corner of Diversey and Clybourn on Chicago's North Side demonstrates just how much money is going into the ground. Surrounded by small factories and a set of new row houses is a $65 million jungle gym of shining steel, twisted insulators, and circuit breakers, along with four large gray-green transformers. This is the new Diversey substation, which takes current flowing in at the rate of 138,000 volts, breaks it down to a more manageable 12,000 volts, and then sends it to customers on the North Side. The new substation was built in just four months, vs. the 18 months to two years it once took Com Ed to build a new substation. Crews worked 24 hours a day, and components arrived from as far away as Brazil and Germany.

Com Ed employees call Diversey "the Cadillac of substations" (this crowd doesn't go for Porsches or BMWs). Two more like it are planned for Chicago by 2005, if residents go along. In the meantime, having Diversey online should help Jim Fitzmaurice avoid a repeat of July 1999, when transformers at two of the North Side's three substations overheated, causing roughly 100,000 customers to lose power. The fire department had to hose down several of the remaining transformers to prevent the blackout from spreading.

A few hundred yards from the new substation, cable inspectors Christopher Minyo and Felton Cole stand 17 feet below ground, checking 12,000-volt cables for cracks, leaks, or any other signs of wear and tear. Cole and Minyo joined Com Ed right out of high school at 18; they have spent more than 30 years climbing into manholes and transmission vaults, where the temperature can easily hit 100 degrees in the summer months. Not that they mind. The huge capital expenditures add up to an overtime bonanza for Com Ed's linemen and splicers, who will inspect more than 16,000 manholes this year and install 300,000 feet of new cable. Next year Com Ed will add another 500,000 feet of cable--roughly ten times the amount put in annually during the mid-1990s. Thanks to 15 1/2-hour workdays and additional overtime on Saturdays, some linemen will earn close to $100,000 this year.

At the same time that Com Ed is rebuilding its ancient infrastructure, the utility is finding new ways to reduce demand during peak periods of power use. In exchange for up to $40 in yearly discounts, nearly 50,000 residential customers have allowed the company to turn off their air conditioning for up to three hours on peak days. Businesses that agree to reduce power sharply can choose from a variety of credits, lower rates, and outright cash payments. Even with incentives to curb demand, plus all the cables and other equipment going into the ground, it will be a footrace over the next two months as Com Ed tries to keep pace with power-hungry customers. And if it survives this summer without trouble, there's next year to worry about, when a fresh 500 megawatts in new demand could hit the power grid.

But Jim Fitzmaurice doesn't have time to worry about 2001, or even to hope for a cool September this year. He still has to face Chicago in August.