Electrical transmission infrastructure is the backbone of the U.S. electric grid, ensuring reliable power delivery from generation sources to homes and businesses across vast distances. A strong transmission network is vital for grid stability, economic growth, and an inclusive energy strategy that incorporates diverse generation sources. With electricity demand rising for the first time in decades, expanding and modernizing transmission is essential to maintaining a resilient and uninterrupted power supply. Below, we review key legislative milestones from the last session of Congress and examine the challenges the 119th Congress will need to address to strengthen the nation’s transmission infrastructure.
Transmission action
Agency activity
In May 2024, the Federal Energy Regulatory Commission (FERC) issued a landmark Final Rule about regional cost allocation and transmission planning. This sweeping rule seeks to accelerate transmission development in FERC-designated planning regions by setting long-term planning goals and clarifying cost-sharing responsibilities—historically a major barrier to grid expansion. A key rule provision requires transmission providers to develop a 20-year outlook, updated every five years, incorporating factors such as generator retirements and regional decarbonization and electrification goals. Additionally, planners must submit at least one cost allocation method for projects selected for construction, ensuring that costs are distributed equitably among beneficiaries. In November 2024, FERC filed Order 1920-A, which expanded the role of states in planning and cost allocation while granting transmission planners more compliance time.
The Department of Energy (DOE) also issued several significant regulatory actions, studies, and commitments of financial support, all benefitting transmission, including:
- In October 2023, DOE published its National Transmission Needs Study, followed by its National Transmission Planning Study in October 2024. Both studies examine future transmission needs in the U.S, with the latter focusing on novel data sets and modeling techniques.
- In April 2024, DOE finalized a rule implementing categorical exclusions from the National Environmental Policy Act for minor transmission projects like reconductoring or the slight relocation of power line segments.
- Also in April 2024, DOE issued a final rule on the Coordinated Interagency Transmission Authorizations and Permits Program (CITAP), to reduce permitting time for transmission. This rulemaking builds on a 2023 Memorandum of Understanding between DOE and eight other federal agencies, designating DOE as the lead agency for all federal environmental reviews on transmission facilities.
- DOE’s Transmission Facilitation Program was allocated a $2.5 billion fund through the Infrastructure Investment and Jobs Act. Throughout 2023 and 2024, DOE awarded several projects anchor tenant capacity contracts, totaling 10 Gigawatts of transmission capacity spanning 10 states. The program’s revolving funds are now exhausted until DOE’s capacity holdings are resold to other parties.
Congressional activity
In June 2023, Congress passed the Fiscal Responsibility Act, which included a key provision on electrical transmission. It directed the North American Electric Reliability Corporation (NERC), under FERC’s oversight, to conduct a study assessing existing electricity transfer capacity between Transmission Planning Regions (TPRs), ultimately recommending ‘prudent additions’ to the grid.
Published in August 2024, the Interregional Transfer Capability Study (ITCS) concluded that the continental U.S. must add at least 35 gigawatts of new transmission capacity to enhance grid resilience amid rising demand and extreme weather events. In 2022, the Niskanen Center released the first-of-its-kind transfer capacity map, with findings that align closely with NERC’s detailed analysis.
Regional and state-level activity
Significant state-level developments will shape the transmission landscape’s future nationally in the coming decade. For instance, the Midcontinent Independent System Operator (MISO) has continued to make progress on its multi-value project portfolio by introducing its second tranche in 2024. Most recently, MISO’s Board approved a set of long-distance high voltage transmission lines to provide capacity across MISO’s territory and into the PJM Interconnection. These new lines will strengthen grid resilience and ensure reliable power delivery across the region.
Additionally, several high-voltage direct current (HVDC) transmission lines across the U.S. have reached key milestones, with some now nearing completion. These include:
- The SunZia transmission line, which will connect a massive New Mexico wind farm to Arizona (and eventually, California) load centers, recently completed a 17-year-long process to gain construction approval. The project is expected to be energized this year.
- The Transwest Express transmission project will traverse five states to deliver wind energy from Wyoming to load centers in the Western U.S. Construction on the Wyoming portion of the project broke ground in 2023. The project is expected to come online in 2029.
- The Champlain Hudson Power Express transmission line will be largely underground and underwater, bringing Canadian hydropower to the New York Metro area. It is expected to be operational next year.
- The Southline transmission project will connect wind and solar resources in Texas, New Mexico, and Arizona without impacting the independence of ERCOT. The project will begin construction this year after a decade-long permitting process.
- The Grain Belt Express transmission line, which will eventually span four states, will begin construction on the Kansas-Missouri section of the project this year. The project will eventually bring Midwestern wind power to load centers in Indiana.
Ongoing or unresolved transmission topics
Despite these accomplishments, several critical rulemakings remain ongoing. Multiple Congressional bills have been introduced focusing on permitting, siting, and expanding interregional transmission, reflecting the growing urgency to modernize the grid. Additionally, at least one pending court case is expected to substantially impact the future of transmission development, shaping how projects move forward in the years ahead.
Agency activity
FERC’s Order 1920-A will remain a key issue for the 119th Congress as additional rehearing requests and compliance mandates unfold. Following the finalization of the order, several utility entities filed a rehearing request, arguing that granting states a role in cost allocation decisions—beyond planning activities—exceeds FERC’s authority. Additionally, FERC has been urged to reconsider its requirement to consult with states on further cost allocation adjustments. As these challenges progress, compliance filings under the new rule are expected throughout 2025 and 2026, though timelines may shift based on the outcome of rehearings.
Meanwhile, FERC is also expected to take up several additional rulemakings during the 119th Congress, shaping the future of grid modernization and transmission expansion.
First, FERC may initiate a proceeding to establish cost allocation measures and planning goals for interregional transmission. Unlike Order 1920, which only focused on planning efforts within regions, a future proceeding would likely focus on supporting grid connections across regions.
Second, FERC may initiate a proceeding on co-located loads, in which data centers or other large customers locate their facilities close to large generators in a behind-the-meter configuration. FERC recently held a technical conference on this issue, and at least one major utility has asked FERC to intervene in creating rules for such grid configurations, which have resource adequacy implications.
Additionally, DOE’s National Interest Electric Transmission Corridor (NIETC) rulemaking is ongoing. Over the past two years, DOE has completed several proceedings in an attempt to eventually designate corridors for transmission development. If designated by the Secretary of Energy, FERC will be empowered to grant permits for developers looking to build in these areas.
So far, three potential NIETCs have been proposed, which were narrowed down from a larger list. Public engagement is ongoing, and if it is determined that environmental impact statements are needed, DOE will complete them before the Secretary of Energy officially designates a corridor.
Congressional activity
Three bills were introduced during the 118th Congress, but none successfully passed both the House and Senate to become law. One key piece of legislation, the Energy Permitting Reform Act of 2024 (EPRA), was a bipartisan effort to simplify the permitting processes for energy infrastructure projects.
EPRA included provisions to improve the permitting process for transmission lines, and accelerate an ‘all of the above’ approach to energy production on public lands.
In contrast, the Republican-led Lower Energy Costs Act (H.R. 1) focused on boosting domestic energy production, reforming permitting processes for all energy sources, and expanding energy infrastructure and fuel exports. Meanwhile, the Democrat-led Clean Electricity and Transmission Acceleration Act of 2023 (CETA) aimed to expand the buildout of transmission lines by connecting mainly renewable sources to the grid.
The Building Integrated Grids With Inter-Regional Energy Supply (BIG WIRES) Act, introduced in 2023, aimed to establish an interregional transfer capability requirement across the U.S., facilitating the movement of energy between grid regions. This transfer capacity is critical for stabilizing the electric grid during extreme weather events or unexpected power outages.
BIG WIRES proposed setting minimum transfer requirements and creating an implementation process at the Federal Energy Regulatory Commission (FERC), making electricity more reliable and affordable for customers. While BIG WIRES has not progressed since its introduction in the Senate, several provisions were incorporated into EPRA.
Initially introduced in the 117th Congress, the Streamlining Interstate Transmission of Electricity Act (SITE) Act was reintroduced in March 2023 and sought to improve the process of building long-range, inter-regional high voltage transmission lines in the United States. The SITE Act would create a new federal siting authority at the Federal Energy Regulatory Commission (FERC) to eliminate barriers to constructing transmission lines crossing multiple states. Currently, the process of building these long-distance transmission lines is hampered by the complex coordination required between states, federal agencies, regulators, industry, and local landowners.
Regional and state-level activity
Currently, transmission line siting and permitting is primarily a state-led process, with each state requiring permits to construct transmission lines that pass through its territory. This means that when a transmission line crosses multiple states, it must secure approval from each state involved.
However, a recent unresolved court case has potentially added a new layer of complexity to this process: the issue of cost differentials resulting from transmission. In the Transource Pennsylvania LLC v. Defrank et al. lawsuit, the state of Pennsylvania attempts to block the construction of a transmission line connecting Pennsylvania to Maryland, citing its authority over siting decisions. The critical question is whether this state authority extends to objections based on cost.
Upcoming Challenges and Focus Areas
Permitting
Under both the Biden Administration and the new Trump Administration, permitting reform has remained a key agenda item. While the 2024 GOP Platform pledged to “streamline permitting” and “end market-distorting restrictions on Oil, Natural Gas, and Coal,” there has been increased focus on transmission permitting. During his confirmation hearing, the Secretary of Energy Chris Wright expressed support for expanding and strengthening the U.S. transmission system. We expect permitting reform legislation to be introduced during the 119th Congress. At the end of 2024, some lawmakers believed that permitting reform could occur under a reconciliation bill. More recently, leaders in Congress have deemed this scenario more unlikely.
‘Clean Firm’ Energy
Clean firm energy sources, such as geothermal energy, continue to gain traction in Congress. Geothermal energy deployment faces permitting challenges due to multiple, sequential federal environmental reviews. Geothermal projects often require state and federal authorizations as well.
In the 118th Congress, the House passed several geothermal bills, including the GEO Act, the CLEAN Act, the HEATS Act, the Geothermal Cost-Recovery Authority Act, and H.R. 6474. While Republican members sponsored the majority of these bills, Democrats often voted in favor of geothermal legislation.
Data Centers
The increasing energy demands of data centers are one of several load growth trends that are heightening the need to accelerate electric transmission expansion. However, the current pace of data center expansion far outpaces the build-out of transmission lines. Growing energy demands from data centers are already straining the grid, and in the wake of utilities raising their rates, consumers are left to face rising electricity bills.
Data center energy demand is expected to double in the next five years, and to prevent delays in connecting to regional electric grids. Experts believe President Trump’s AI and tech industry backers will look to direct natural gas generation to facilitate the data center expansion boom. Other recent developments include Constellation Energy’s planned restart of the Three Mile Island nuclear reactor to power Microsoft’s data centers. However, in the medium- and long- term, under the Trump administration’s ‘all-of-the-above energy policy,’ Congress and businesses may explore options to bring new clean firm sources onto the grid.
Transformers and Critical Infrastructure
The demand for critical infrastructure components, such as transformers, is expected to rise in the coming years, driven not only by grid modernization efforts but also by the need to rebuild areas devastated by natural disasters. Lead times for transformer production have increased significantly since the COVID-19 pandemic. The primary factors contributing to these delays include access to raw materials, workforce shortages, and lack of equipment standardization, which have combined to create shortages amid growing demand.
Looking ahead
Transmission expansion in the United States is vital to keep up with rising consumer and private sector electricity demand. While FERC and DOE have issued rulings and regulatory actions to boost transmission, supporting legislation must be passed in Congress to expedite permitting and support reliable power delivery. Regionally, multi-state transmission lines that strengthen grid resilience are trending, but legal issues and state regulations complicate their build-out. Moreover, the increasing energy demands from data centers and grid modernization further highlight the urgent need to expand transmission infrastructure.