With its eyes on building out electric power transmission lines in the near future, the United States Department of Energy (DOE) recently announced $1.5 billion in funding from the Bipartisan Infrastructure Law for four new projects.
The new projects will be part of a revolving fund program from the DOE called the Transmission Facilitation Program (TFP), which we introduced in the Consensus Grid Primer. Essentially, the program enables the department to speed up or enlarge transmission projects by investing in them. To do so, it can borrow up to $2.5 billion by issuing loans, participating in public-private partnerships spanning multiple states or transmission planning regions, or entering capacity contracts as an “anchor customer.”
Through these capacity contracts or transmission services agreements, the DOE affirms that it will buy part of the transmission line’s capacity once it is up and running.
This financial commitment from the federal government reduces risk for the project developers, draws in additional investors, and encourages other transmission customers to purchase capacity.
Any project that the DOE backs through this program should serve the public interest in the grid. These efforts include enhancing the electric system’s capacity, efficiency, resiliency, or reliability, contributing to interregional transfer capacity that will contribute to economic growth, or helping lower greenhouse gas emissions to meet environmental goals. At the same time, the projects should enable the DOE to recover costs and refill its revolving fund to allow it to invest in other projects.
Photo Courtesy Electric Reliability Council of Texas
First Round of Contracts
Last October, the DOE announced negotiations for the first capacity contracts that the program would support. The three projects, spanning six states, amounted to a $1.3 billion commitment that would add 3.5 gigawatts (GW) of grid capacity and create more than 13,000 direct and indirect jobs.
The first was the Cross-Tie 500kV Transmission Line. It will be a 214-mile, 1,500-megawatt (MW) bidirectional transmission line connecting systems in Utah and Nevada and enabling better transfers of solar and wind energy in the West. It has since been awarded more than $226 million. Project developer TransCanyon, LLC expects it to:
- Reduce carbon emissions by about 850,000 tons annually or 19.5 million tons between 2028 and 2050,
- Raise $9.1 million annually through project development taxes, and
- Create more than 4,100 jobs directly and indirectly.
Next, the Southline Transmission Project will be a 175-mile, 748 MW transmission line between Hidalgo County, New Mexico, and Pima County, Arizona, supporting renewable generation projects in the former state and delivering clean energy to the fossil fuel-reliant latter. It will additionally increase the capacity of a Western Area Power Administration transmission line already in operation.
This first phase of a longer line was awarded $477 million. Project developers Grid United, LLC, Black Forest Partners, LP, and Hunt Transmission Services, LLC expect the project to result in lower energy bills for disadvantaged communities, $4 million raised for local communities via donations, partnerships, and sponsorships, and 900 union jobs.
Finally, the Twin States Clean Energy Link was a proposed 1,200-MW high-voltage direct current (HVDC) bidirectional line that would expand grid capacity in New Hampshire and Vermont and connect them to clean energy sources in Quebec. However, this project dropped out of the contract negotiations in March.
In April, the DOE selected another project out of the first round of contract applications.
The Southwest Intertie Project (SWIP-North) will be a 285-mile, approximately 2,000-MW transmission line between Twin Falls, Idaho, and Ely, Nevada.
Additionally, the DOE will upgrade an existing substation in Nevada, adding approximately 1,000 MW of capacity to the One Nevada Line that already runs through the southern part of the state. These developments will:
- Enable wind power to be transferred from Idaho to Southern Nevada and California,
- Enable solar power to fill the reliability gap in the Pacific Northwest’s energy market, and
- Offer an alternative route for power to be sent along in the face of wildfires.
The DOE awarded up to $331 million for this project, expecting it will create 300 union construction jobs. Project developer Great Basin Transmission, LLC expects the project to support hundreds of construction jobs.
Photo Courtesy Grid Deployment Office
Round 2 of Contract Awards
Most recently, on Oct. 3, the DOE announced four conditional capacity contract awards from round two of the program. Not only will this $1.5 billion commitment add almost 1,000 miles of transmission development and 7,100 MW of capacity to the grid, but the four projects are also expected to create almost 9,000 jobs.
Photo Courtesy U.S. Department of Energy
One of these projects, Southline, entails phase two of the project with the same name from round one of the awards. Phase two entails a 345-kilovolt (kV) High Voltage Alternating Current line with 1,000 MW of bidirectional capacity located solely in New Mexico, spanning 108 miles between Hidalgo County and Las Cruces.
The line is intended to support the electricity needs of the industries growing in the state and producing semiconductors, batteries, and data centers. The DOE expects to award up to $352 million and that the project will create at least 150 new construction jobs.
The Aroostook Renewable Project steps in to fill the gap left by the Twin States Clean Energy Link in New England. Avangrid will build a substation in Haynesville, Maine, and a 345-kV Alternating Current transmission line with 1,200 MW of capacity to connect it to another substation already up and running 111 miles away in Pittsfield, Maine.
A 345-kV overhead line will also be built to connect the Pittsfield substation to the Coopers Mills substation in Windsor, Maine. The Haynesville substation will, therefore, be linked to the Independent System Operator-New England (ISO-NE) transmission network, enabling the rest of the region to benefit from northern Maine-generated clean energy, where three wind developments are already thriving. The DOE expects to award up to $425 million and that the project will create more than 4,200 temporary construction and 30 permanent jobs in operations.
Photo Courtesy Grid Deployment Office
Third, the Cimarron Link project will consist of a high-voltage direct-current (HVDC) transmission line with 1,900 MW capacity, spanning 400 miles between Texas County and Tulsa in Oklahoma. It will enable solar and wind power generated in the panhandle to be transmitted to the eastern part of the state and throughout the Southwest Power Pool, meeting demand from growing load centers. The DOE expects to award up to $306 million and that the project will create more than 3,600 temporary construction and 20 permanent operations jobs.
Meanwhile, Texas is perhaps the biggest beneficiary of the new announcements. Southern Spirit will be a 525-kV High-Voltage Direct-Current (HVDC) line with 3,000 MW of bidirectional capacity. It will cover more than 320 miles to connect Rusk County, Texas, to Choctaw County, Mississippi, passing through Louisiana. The DOE expects to award up to $360 million and that the project will create 850 construction and 305 operations jobs.
The reason that Southern Spirit is such a huge deal is that it will connect the Electric Reliability Council of Texas (ERCOT) grid to other grids in the southeast, including Midcontinent Independent System Operator South (MISO-S) and Southern Company (SOCO), for the first time in history.
Texas’s refusal to send — or receive — interstate power has caused numerous issues as climate events ramp up. According to an analysis by Climate Central, between 2000 and 2023, Texas had the most weather-related power outages of any state, with 210.
2021’s Winter Storm Uri led millions to lose electricity, with power producers plunging offline and demand outpacing generation. The Department of State Health Services reported that 246 people died. Notably, El Paso was one of the areas that managed to keep its power on, with El Paso Electric as part of the Western power grid rather than ERCOT.
Photo Courtesy Southern Spirit Transmission
With the addition of these four projects, spanning Louisiana, Maine, Mississippi, New Mexico, Oklahoma, and Texas, almost all of the $2.5 billion in funding allocated for the TFP has now been committed. As the DOE makes its money back off of these projects, the Grid Deployment Office will monitor the revolving fund and keep its eyes out for opportunities that it can back in the future. All in all, the program is poised to help the nation’s transmission systems advance into the future.
