Apparently when they ran the streetcars in Washington DC laws had been written that would require that no overhead wires in the District West of the Anacostia River be used to power anything. While this law keeps out unsightly wires it also discourages bringing back the streetcars that once ran down the streets of Washington. The pilot Anacostia Streetcar project on an abandoned right of way is not subject to these restrictions however anything West of this new project is affected.
The only possible fix is the third rail technology that has been used in Bordeaux France. This system, pioneered and owned by Alstom is rumored to not be available and the word on the street is that it won't be available in the United States any time soon. According to Werner Uttinger, the safety certification process in the United States is too much to overcome to bring this technology to the United States so for now it seems that DC will have to invent its own power system or keep dreaming.
UPDATE: In the comments Christof has this to say...
The "no overhead wire" law predated DC's streetcars. As a result, the city used conduit streetcars, with the electrical supply buried in a slot in the street (resembling a cable car slot). As proved by more than 70 years of operation, it was a workable system, but expensive to build and labor-intensive to maintain. Pictures here. If you ever wondered what streamliner cable cars might have looked like: Click Here
Apparently also, since it was so expensive to have the underground conduit, there were pits on the outskirts of town to switch to overhead wires. This is a similar situation to Bordeaux where the Alstom trainsets change to overhead wires outside the historic downtown. Thanks for the Links Christof.