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Released May 12, 2025 | SUGAR LAND
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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--The federal government is in the early stages of trying to fix the nation's interstate electricity transmission system. Will the fix be up to the task? And can it be implemented before a widespread failure of the U.S. grid occurs, like what happened to the Spanish and Portuguese electric grids at the end of April?

Gridlock has long forced Congress to legislate in response to a crisis. Pre-crisis legislation disappeared sometime late in the prior century. But there are signs that Congress is trying to get ahead of the transmission crisis curve.

On February 6, Representative Troy Balderson (R-Ohio) introduced a bill, H.R. 1047, the ''Guaranteeing Reliability through the Interconnection of Dispatchable Power Act,'' or the ''GRID Power Act," to require the Federal Energy Regulatory Commission (FERC) to "reform the interconnection queue process for the prioritization and approval of certain projects, and for other purposes." The "certain projects" referenced in the bill's summary are dispatchable sources of electric generation, meaning gas, coal, nuclear, oil and, under certain conditions, hydroelectric generators. The bill has two cosponsors.

On April 30, the powerful House Energy & Commerce (E&C) Committee held a hearing on H.R. 1047. It followed testimony on March 25 from the leaders of the seven major grid operators about the precarious state of the nation's electric grid. The Energy subcommittee, under the leadership of Representative Bob Latta (R-Ohio), heard from leaders at PJM Interconnection (PJM) (Valley Forge, Pennsylvania); Midcontinent Independent System Operator (MISO) (Carmel, Indiana); Southwest Power Pool (SPP) (Little Rock, Arkansas); New York Independent System Operator (NYISO) (Rensselaer, New York); ISO New England (ISO-NE) (Holyoke, Massachusetts); California Independent System Operator (CAISO); and Electric Reliability Council of Texas (ERCOT). That March 25 testimony was before the Energy subcommittee of the broader E&C committee.

The grid managers agreed they all faced some variant of this fundamental tension: Electricity demand is rising quickly--in nontraditional and non-coincident ways--while the generation and transmission infrastructure needed to support it is being strained, delayed or retired. Most specifically mentioned the rise of data centers using artificial intelligence (AI), which consume far more electricity than earlier versions of data centers that lacked AI.

By providing expert testimony on a national problem, the grid managers emphasized the need for congressional action. In announcing the April 30 hearing of the full E&C committee, Committee Chair Brett Guthrie (R-KY) and Subcommittee Chair Bob Latta (R-OH), said: "Our nation is at an energy crossroads. It's clear that securing our electric grid and powering AI will require abundant and reliable energy for decades to come. Over the past several months, our Committee has heard from energy producers, grid operators, and experts on AI that have discussed the need to produce more baseload power. This legislative hearing offers us the chance to discuss specific policy proposals to help achieve this goal and ensure American energy dominance."

The April 30 E&C committee hearing featured testimony from officials at the U.S. Department of Energy (DOE), the Federal Energy Regulatory Commission (FERC), an independent regulatory agency that is part of DOE, various industry groups, including the National Rural Electric Cooperative Association (NRECA); Interstate Natural Gas Association of America (INGAA); the Electric Power Supply Association; and Roselle LLP, a boutique energy law firm.

This Congress has a broad and active energy agenda, and efforts to improve the reliability of the transmission grid is just one part of it. As it relates to the reliability of the transmission grid, Congress aims to shorten interconnection queues, support the construction of dispatchable generation, and prevent premature retirements of those dispatchable resources.

President Donald Trump got involved April 8 when he issued an executive order, "Strengthening The Reliability and Security of The United States Electric Grid," which noted "an unprecedented surge in electricity demand" that, when coupled with "existing capacity challenges, places a significant strain on our Nation's electric grid. Lack of reliability in the electric grid puts the national and economic security of the American people at risk. The United States' ability to remain at the forefront of technological innovation depends on a reliable supply of energy from all available electric generation sources and the integrity of our Nation's electric grid."

And FERC, which regulates bulk wholesale electric markets in interstate commerce, also has been busy: On April 22, it issued Order 1920-B, to clarify for the second time its Order 1920 requiring transmission owners to conduct "long-term regional transmission planning to ensure the identification, evaluation, and selection, as well as the allocation of the costs, of more efficient or cost-effective regional transmission solutions to address long-term transmission needs." Cost allocation has long been a contentious issue in transmission planning.

Industrial Info has reported extensively on the rising concerns of utilities and grid managers about electric reliability and generation resource adequacy. For more on that, see March 11, 2025, article - Texas Legislature Wrestles with Balance of Power on the Grid; February 18, 2025, article - Ameren Boosts Five-Year Investment Plan with MISO T&D Projects; February 14, 2025, article - FERC Greenlights PJM Plan to Fast-Track Interconnection Approval Process for Key Projects; December 2, 2024, article - New-build Gas Generation Can Head Off Projected Electric Generation Shortfall; and November 18, 2024, article - Grids on Edge Against Severe Winter Weather, Study Finds.

Developers are trying to build about 1,669 transmission projects across the U.S., with a combined total investment value (TIV) of about $118.4 billion, according to data tracked by Industrial Info. The projects break down as follows:
  • Roughly 364 of those proposed U.S. transmission projects, with collective value of approximately $24 billion, are considered to have a high probability of beginning construction according to their current schedules.
  • Another 481 projects, valued at roughly $28.5 billion, are considered to have a medium probability of beginning construction according to their schedules
  • IIR has deemed that 824 other planned U.S. transmission projects worth just under $66 billion have a low probability of beginning construction according to their current schedules.
Attachment
Click on the image at right to see the U.S. market region where developers have scheduled transmission projects that Industrial Info has deemed have a "high" probability of moving forward according to their schedules.

Britt Burt, Industrial Info's senior vice president of research for the Electric Power industry, made this comment: "The regulatory process for permitting, siting and building transmission lines in the U.S. has been and continues to be a quagmire. There have been several attempts to reform that process over the years, but we have not seen substantial progress."

"Much of the grid is 40 years old and in the grand scheme of things not much has been done to improve and streamline the permitting, siting and construction process. The New York blackout of 1965 led to the establishment of the North American Electric Reliability Corporation (NERC) in 1968, and periodic blackouts in more recent decades have led to FERC establishing grid management organizations to ensure electric reliability. But more work is needed."

"It is now well past time for Congress, FERC, the White House, grid management organizations, utilities, merchant power generators and outside stakeholder groups to work together to expedite the permitting, siting and construction of new transmission lines as well as dispatchable power generation. Maybe that's what we're seeing now, with all this activity at the federal level. I can only hope."

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
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