Looking for a turnaround in transmission

After years of stalled transmission buildout, there are new signs of progress. Earlier this month, SPP approved $8.6 billion in transmission projects across 14 states. Major plans are emerging in MISO, PJM, and ERCOT. Despite the DOE canceling its loan guarantee, the Grain Belt Express is still moving forward. And regardless of court battles, so is the New England Clean Energy Connect. Are these signs that the U. S. could start building transmission at scale again? In this episode, Shayle talks to Rob Gramlich, founder and president of Grid Strategies. He and Shayle cover topics like: Why Rob says the DOE’s efforts to fast-track large-load interconnection is a positive sign for transmission buildout The recent buildout of 880 miles of transmission and why it may look better than it is Why transmission hasn’t benefited from data center investment Specific projects, including SPP’s transmission backbone and the Grain Belt Express Rob’s outlook on buildout over the coming year The uncertain future of permitting reform despite bipartisan support Resources: Catalyst: Unpacking DOE’s proposal to transform data center interconnection Latitude Media: How the Grain Belt Express lost its LPO loan E&E News: Data center growth cited in defense of MISO transmission plan Fill out our short podcast listener survey for a chance to win a $100 Amazon gift card. Credits: Hosted by Shayle Kann. Produced and edited by Daniel Woldorff. Original music and engineering by Sean Marquand. Stephen Lacey is our executive editor. Catalyst is brought to you by EnergyHub. EnergyHub helps utilities build next-generation virtual power plants that unlock reliable flexibility at every level of the grid. See how EnergyHub helps unlock the power of flexibility at scale, and deliver more value through cross-DER dispatch with their leading Edge DERMS platform, by visiting energyhub.com. Catalyst is brought to you by Bloom Energy. AI data centers can’t wait years for grid power—and with Bloom Energy’s fuel cells, they don’t have to. Bloom Energy delivers affordable, always-on, ultra-reliable onsite power, built for chipmakers, hyperscalers, and data center leaders looking to power their operations at AI speed. Learn more by visiting BloomEnergy.com.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

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• 0:34Speaker 01

  Latitude Media, covering the new frontiers of the energy transition.

• 0:39Shayle Kann?

  I'm Shail Khan, and this is Catalyst.

• 0:43Speaker 03

  It was quite dramatic that the Secretary of Energy, Secretary Wright, wrote this letter to FERC saying, "Here's a rulemaking I'm putting before you on access to the grid." It strongly proves the point. The whole AI industry needs the grid and that this current administration is willing to do anything and everything to support AI. So now, now we need to see the next step of, "Okay, well, let's expand the grid."

• 1:12Shayle Kann?

  Coming up, transmission, transmission.

• 1:25Speaker 01

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• 2:07Speaker 01

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• 2:22Speaker 00

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• 2:57Shayle Kann?

  I'm Shayle Khan. I lead the early-stage venture capital strategy at Energy Impact Partners. Welcome. Apologies for my singing voice. We're talking transmission this week because I had Rob Gramlich on a year ago, a little over a year ago, to talk about the woeful state of US transmission build-out, which has truly been embarrassing for the past decade or so, and even worse in recent years. And we talked about all the reasons why that was true and what might change and so on. But I'd say the outlook was we're in a tough spot and a bunch of things need to change in order for us to start building significant transmission lines again. And just as a reminder, we need to build new transmission lines for lots of reasons.

• 3:40Shayle Kann?

  We need to integrate lots more renewables on the grid and other generation. And also now, we need to serve all of this new load that's showing up in the form of data centers. So the need has doubled, and that speaks to why I wanted to have the conversation again today, which is a lot has changed in the past year in the electricity sector. Things in other parts of the market have changed substantially, and transmission may or may not be the hardest thing to change. So I wanted to see whether all of the rapid change, all of the money that is flowing into the sector has moved the needle on building out new high-voltage power lines in the US. So I brought back Rob Gramlich from Grid Strategies to do an update.

• 4:25Shayle Kann?

  Here's Rob.

• 4:28Shayle Kann?

  Rob, welcome back.

• 4:29Speaker 03

  Thanks, Shayle. Good to be with you.

• 4:31Shayle Kann?

  All right, so you and I talked on this podcast a little over a year ago about transmission and new transmission, I would say, in particular in the US. And it was a tale of woes and a big, long exclamation of how amazing it is that we've been able to build so little transmission, new high voltage transmission in particular in the United States in the past decade or so. And I wanted to have you back on because, you know, the past year has changed many things about the electricity sector. And I wonder whether it has changed this thing. So my high level question for you is, do you think we're in a fundamentally different position with regard to, I don't

• 5:13Shayle Kann?

  know, your outlook on new transmission build in the US relative to a year ago? Or is it more the same place?

• 5:21Speaker 03

  Well, we're still struggling to put the pieces together. I think we do have a good platform that actually has a pretty decent shot of, you know, surviving the political change we've all experienced because transmission is so critical for data centers and AI-driven data center demand. But we don't really know that for sure yet. Things are just sort of getting settled with the relevant agencies here in Washington, Department of Energy and FERC. So we don't really know how that's going to turn out. We did actually have an uptick in new lines in 2024. So that was new because I think when we spoke, we

• 6:04Speaker 03

  were talking about how there were only 55 miles of new high voltage transmission lines in 2023, which is down, you know, a trickle from the 4,000, you know, that had been built 10 years prior, which hopefully I wasn't all woe is me, woe is us.

• 6:21Shayle Kann?

  I was woe is us, suddenly.

• 6:24Speaker 03

  I mean, you know, I do like to point at that experience 10 years ago and say, hey, look, we were able in this country with all the permitting challenges we have to build 4,000 miles of new high voltage transmission. I connected all this clean energy. So there is hope. And we like to point to that example of saying, look, when we get the pieces together, right, we can do this. But then, you know, some things happened and we went down to a trickle of only 55 miles. Well, there was an uptick to like 880 ish miles in 2024.

• 6:57Speaker 03

  So that's, you know, some good news. When I first saw that, I thought, oh, great. Like, we're starting to turn things around. But if you look a little bit closer, it's you kind of see, oh, wait a minute. These were lines that were like begun 10 or 15 years ago that just finally got finished. Now, you know, you could say, all right, that's a good story because a number of these did need like federal permits from federal agencies. And I think during the Biden administration, they were approving transmission projects. And so, you know, that's good news and, you know, that could, could continue, might not continue in the current administration. We don't know yet, but there, you know, there was an uptick. So in some ways, we've gotten some permitting.

• 7:42Speaker 03

  But some of the key policies like it FERC in order 1920, you know, it could, you know, be sort of branded as a democratic thing. I think it was bipartisan and, you know, it actually had no preferences for renewable energy or anything like that. So I think it should be safe and robust to a, you know, partisan change with new commissioners coming in. But we don't know yet. We don't know what the new commissioners are going to do about 1920. Are they going to implement it or just, you know, kind of render it, you know, sort of a dead letter and a weak order?

• 8:13Shayle Kann?

  Can you briefly re-describe 1920?

• 8:17Speaker 03

  Sure. So that was the order passed, issued a few years ago for proactive, long-term transmission planning, 20-year plans for each region. So it applies to the, the grid operators like PJM and MISO and SPP and California ISO, but also to the non-RTO utilities. They need to get with their neighbors and put regional plans together. And so, you know, significant order, very well crafted, in my opinion. Chairman Glick and his team, you know, separated it through and Commissioner Clements and others. Chairman and then Commissioner Christie was there for the latter part of it.

• 9:01Speaker 03

  He, he made some changes, but it, so it, you know, it kind of wound up very sort of bipartisan.

• 9:09Speaker 03

  You know, technology neutral, which is fine, but it, you know, it's there. Should be done. The courts will have their say. Hopefully, people will revoke their challenges from the courts and just let it stay as it is. And then hopefully FERC will actually, you know, implement it with teeth and not just accept any old thing that comes in on on compliance. But that is the next step is the regions file their compliance approaches with FERC and FERC, you know, kind of on the on the margin can either make it be a weak rule or remain a strong rule.

• 9:46Shayle Kann?

  I mean, is this the fundamental reason why things? So like in in other parts of electricity world, things have changed a lot in the past year, right? And and it's driven by just the it's like necessity is the mother of invention. It's a combination of necessities and mother invention. And there is essentially an endless pool of money willing to throw itself at any solution that gets more power to data centers faster. Is the reason why this hasn't like transmission hasn't benefited from that that like the only way to solve it is kind of it's like what you're describing. It's like a FERC order that has to go through the ISOs that takes years to go through the process.

• 10:28Shayle Kann?

  And so it's just inherently a slower thing. Because you could imagine a scenario where sort of similar to what we're seeing in other categories, right? Like hyperscaler wants to build data center and strikes a deal with utility where they can get interconnected faster if they pay for 100 miles of new 765 KV line or something like that. Like you'd think that kind of thing would be happening.

• 10:56Speaker 03

  Yeah, I think it's just, you know, it's not right in the the bull's eye of, you know, the data centers immediate need or the utilities immediate need. It's sort of the, you know, the background infrastructure that everybody relies on. And absolutely, you need to build up that network, that backbone network to support all this new load. But it's not the obvious thing. It's not what, you know, incoming officials at the Department of Energy immediately go to as, oh, here's immediately what we need to go focus on. And it's not, you know, it doesn't catch a lot of the press attention. A lot of the press attention is about, oh, look at this, you know, onsite generation

• 11:38Speaker 03

  option or a new, you know, now we're doing rice, you know, generators or this or that or the other onsite option. Those get, for some reason, more attention. But, I mean, my understanding from the hyperscalers and the data center developers is that they all really, really want the full network transmission service with all of the good, you know, backup and cushion that that network provides to their operations and the 59's reliability that you only get that way.

• 12:08Speaker 03

  And so I think the message is starting to filter through the process. I mean, it was quite dramatic that the Secretary of Energy, Secretary Wright, wrote this letter to FERC saying, you know, here's a rulemaking I'm putting before you on access to the grid.

• 12:26Shayle Kann?

  Right, but it's not really, it doesn't really have anything about transmission in it, right?

• 12:30Speaker 03

  Well, it's, it's access to, to transmission. And then, so the next, it begs the next question of, well, if you care that much to do this dramatic order that's, you know, almost never used authority and take all the, you know, the beating from state regulators who would be losing some jurisdiction, if you're willing to do that, well, then you must care about the size of the grid, the actual capacity of the grid. You know, what's access to a grid if it has no capacity for you? So it, to me, it strongly proves the point that the whole, you know, AI industry, if

• 13:10Speaker 03

  you want to call it that, needs the grid and that this current administration, which is willing to do anything and everything to support AI being done in this country, it proves that the transmission network is critical to that because they're taking this major action to get access to the transmission grid. So now, now we need to see the next step of, okay, well, let's expand the grid and all the things that come with that, which is Order 1920 and then interregional transmission and then using the DOE programs, like the transmission facilitation program, we could go on, but there are a lot of things. That FERC and DOE can do to, you know, actually enable the expansion of the grid.

• 13:56Shayle Kann?

  Is it, is this a little bit of a tragedy of the commons, kind of a problem?

• 13:59Speaker 03

  Hundred percent.

• 14:00Shayle Kann?

  Yeah, it's where it's like the, any given data center company needs transmission expansion. But you can't attribute that transmission build out to that specific data center necessarily. And so they can't say, I will put down money for you to build out new transmission lines specifically for me. And as a result, it gets pushed down the order of priority list because they're like, okay, immediate concern is getting this data center connected to the grid. And so instead I'm just going to go buy a bunch of gas generators or whatever it is.

• 14:34Speaker 03

  Exactly right. Look, these hyperscalers and you know, you and I know them all. And I'm sure we both have many friends at, at each of them. They are in intense competition with each other, you know, to the point where the people I know at the hyperscale, they don't actually know which data centers are being developed for their company because it's so commercially sensitive that only a few people, even in the company, know which ones they're really planning to go forward with. And so if they're in that intense competition, like company to company, then it's of much less interest, just much less incentive for, you know, them to go work on the, the network that all of their competitors get to use just as much as they do.

• 15:17Speaker 03

  So that's classic public good tragedy of the commons. And, you know, it's the reason why, you know, in this scenario, this is a classic reason why you have government leadership and, you know, as a nation, if we are in an AI race with China, then we should be using federal leadership to build out the network for all of those data centers here that want to be in this country and operating here, not the Middle East or, you know, Asia or wherever else. And so, you know, for this to happen, right, you really need federal leadership. States and regions can do a lot as well and localities, but you know, we really need to build out the transmission network, which is an interstate federally regulated network.

• 16:05Speaker 01

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• 18:15Shayle Kann?

  Let me throw a couple of recent announcements at you and just get your take on like what, how big a deal is this and what does it mean? Okay, so one was, I think, just recently, SPP, Southwest Power Pool, got, I think, approval to build this 765 KV transmission backbone, as they called it. That sounds quite positive. How big a deal is that?

• 18:39Speaker 03

  Yeah, that plan, the ITP plan, is huge. I mean, they went back and forth and I don't know the, like, the final number in terms of, it might be closer to the 10 billion version rather than the $20 billion version.

• 18:54Shayle Kann?

  Yeah, it's like 8.6 or something was the number I read.

• 18:57Speaker 03

  Okay, so, you know, it got unfortunately cut back. I hope there's a way. Here's another way, like, the federal government could come in and say, hey, for, you know, AI race with China, we want to get you back up to the 20 billion and we're going to help you. But hopefully, it ain't over till it's over on that. But at any rate, directionally, it's fantastic. A 765 KV collector loop with, you know, I mean, anybody's favorite generation source is available in that, you know, Great Plains footprint and, you know, the market will decide which ones go forward. But there certainly could be a tremendous amount of clean energy that connects to that system and powers a tremendous amount of data center and new manufacturing and other load in that area.

• 19:43Shayle Kann?

  Okay, so now an announcement that points in the opposite direction, which is that the DOE, the Loan Programs Office, canceled the loan guarantee that was going to be offered to the Green Belt Express project. So to your point, it seems from all the other indications that this administration would be super in favor of new transmission build out. That cancellation seems like an odd decision in light of that. What do you make of it?

• 20:10Speaker 03

  Yeah, so many people interpreted that as though maybe they don't care about transmission. I don't interpret it that way. I think that was a very unique circumstance where a senator decided to use his minutes in the Oval Office to talk about a specific loan to a specific transmission line. Okay, that's not going to happen very often in our, you know, in the future. And if it does, anytime a senator uses his time with the president to talk about a specific loan to a specific line, that project, that loan anyway, will be in trouble. The project, I expect, will go forward.

• 20:53Speaker 03

  It's a great project, but that loan is no longer. So I just think, you know, I mean, presidents do things at the request of senators sometimes, and, you know, that's what happened.

• 21:07Shayle Kann?

  How many? Okay, I guess the way to ask this question is, you said before, like, okay, to the extent that we built anything out recently, it's been stuff that was in the works for the past 10 years, et cetera. So presumably, we should have pretty good visibility, then, into how much we will build for the next two, three, four, five years. How much is it?

• 21:31Speaker 03

  Yeah, I think it's looking pretty good. I mean, you've got 765 KV AC plans. We mentioned SPP, but MISO in the more of the, like, the Great Lakes part of the Midwest is looking at 765 PJM as well, and they just came out with a new, very, much more ambitious plan than we've seen from them in the Mid-Atlantic. And ERCOT in Texas also has 765 KV plans. So that's four regions who are, for the first time in many decades, doing the highest AC voltage transmission lines that we have. So, you know, those take time.

• 22:13Speaker 03

  But those are now being planned and there were also plans that started more like five, seven years ago, the MISO long-range transmission plan. Some of these are still facing some challenges, like that one has, there's a challenge at FERC with some states. But hopefully that will go forward. California ISO has continued. They've been cranking along quietly for many years. Pretty much they're the only ones who have kind of gone nonstop on transmission. So every year they're doing more and it's bringing in resources from around the West. So yeah, I do think there's a lot of indications. New York has some.

• 22:58Speaker 03

  There's a new line that NECC from Quebec into New England is finally going forward after some back and forth and tough court decisions and opposition. But I do think there are a bunch that are on their way and looking promising.

• 23:16Shayle Kann?

  So the curve may bend back up a little bit, at least. Like that stuff comes together. We could be building hundreds, thousands of miles per year?

• 23:26Speaker 03

  Yeah, yeah, we could be getting into a few thousand or more miles per year.

• 23:30Shayle Kann?

  And then how much is all this stuff tied up in the question of permitting reform? How much does that matter? Because it's not clear to me whether that's actually on the horizon. It may be, but it certainly hasn't happened yet. Do we need it?

• 23:44Speaker 03

  I do think we need it. I mean, you can build things here and there under the current regime, which again was proven by 10 years ago, we did it. But there are real limitations with that. And some of it is this big interregional opportunity. Like, we don't really have a system in place to build interregional transmission from region to region. MISO to SPP or SPP to the interior West or interior West to the coast. All of these neighboring regions, there's a massive untapped value of transmission there and, you know, we don't have a regional transmission organization with a planning

• 24:28Speaker 03

  process to deal with that. And this whole more, looking at the whole industry on a more macro scale, you know, we're evolving out of a industry that started with 3,000 utilities doing their local thing in their local fiefdom without much of a, you know, tie between them. And so we're crafting onto the top this more regional and then interregional approach. And it's a process, a multi-decadal process that we're still working through and we're nowhere near the end game on that. So we're still working through on that. Permitting reform, at least as set up in the Manchin-Boraso Energy Permitting Reform Act, EPRA, from a couple of years ago, it has a transmission title.

• 25:13Speaker 03

  That is a big focus on interregional transmission planning and, you know, kind of determining what are the list of benefits that are the basis for cost allocation and some federal permitting role in there. So those things, in my opinion, are extremely helpful. It's a great bill. It was bipartisan, passed the Senate Energy Committee 11 to 4. Only one Republican opposed. Same one, Senator Hawley, who opposed the Grain Belt loan. But otherwise, very strong showing at the Senate Energy Committee. And now it's, you know, I think it's teed up for the broader permitting package, which

• 25:55Speaker 03

  there are complexities on the other components of the package that both House and Senate are working through. I expect to see the House moving pretty quickly on one piece, the NEPA-related piece. And that'll be an important milestone. So I do think there's a chance, and I do think it would have a very big impact on transmission and enabling transmission going forward.

• 26:20Shayle Kann?

  How much innovation do you see in the transmission world? In the sense of either planning, right? Like, people have talked about citing transmission lines along railways, that kind of thing, undergrounding, technology innovation. What do you think is interesting?

• 26:35Speaker 03

  Yeah, I do think there are some very interesting, I'll call them, advanced transmission technologies. One category is high-performance conductors with carbon core or superconductors, where you put up a new wire either on the same tower or rebuild the tower.

• 26:53Shayle Kann?

  That's for reconducting more than newbuild, right?

• 26:55Speaker 03

  Yeah, that's right. It's for both. But yeah, but it does open up the opportunity for reconducting, which is very fast because you don't need a new right-of-way for that. So that's one category. Another category is grid-enhancing technologies, which are more the operational-type technologies: topology optimization, advanced power flow control, dynamic line rating, that sort of thing. And storage as transmission you could put in there. And those increase headroom and capacity in a quick way. And again, the mantra in Washington, anyway, is "speed to power", because that's kind of the mantra for the data center community right now. And those things are speedy.

• 27:37Speaker 03

  They're relatively inexpensive and they're speedy. You know, they don't fully solve the problem. It's not like you don't need new transmission as well. But they do increase the headroom. And we all need headroom because it's a very constrained, congested grid right now.

• 27:53Shayle Kann?

  So, final question, I guess. You mentioned we don't really have a system for interregional transmission. There are those out there, folks at Grid United, run by Mike Skelly, famous, longtime transmission developer, Invenergy and others, who have planned projects that are interregional. So how are they doing it?

• 28:13Speaker 03

  Yeah, that's right. I mean, I think there is a little market for some transmission that you can cobble together enough, you know, basically money from customers, like voluntary subscriptions from utilities along the route or at either end in order to pay for some lines. You know, long term, I don't think that's enough to build anywhere near the optimal amount, but there is some and they're, you know, these developers to their credit are looking at like some super high value pathways and they have, I think in many cases, very cleverly figured out good routes that, you know, can be put together and work things

• 28:56Speaker 03

  out with landowners. So many of them are pretty far along on that and what they do. I mean, they kind of pass the hat to utilities and say, hey, would you pay this much? And if they get enough, then they can go forward. And, you know, they do often need federal permits and one hopes that there are actual staff at the Department of Interior and places like that to actually issue permits. It does rely on that in many cases. But, you know, some of these lines are, you know, looking very, very promising. So I do think we will get some of those under the current regime, even if we don't get permitting reform. But if we get permitting reform, you know, and/or significant FERC action in the interregional space, I think we would get a lot more.

• 29:40Shayle Kann?

  All right, Rob. Thanks for the update on the lines. We'll be back in another year and see if things have changed substantially from now.

• 29:48Speaker 03

  All right. We'll be ready for it. Good to talk to you, Shayle.

• 29:50Shayle Kann?

  Rob Gramlich is the founder and president of Grid Strategies. This show is a production of Latitude Media. You can head over to latitudemedia.com for links to today's topics. Latitude is supported by Prelude Ventures. This episode was produced by Daniel Waldorf. Mixing and theme song by Sean Marquand. Stephen Lacey is our executive editor. I'm Shayle Khan. This is Catalyst.