(Texas Scorecard) – Originally intended to be a regional grid-strengthening plan, the new statewide transmission line project will burden Texas’ energy prices for years to come—without legislative or public consent.
The Texas Public Policy Foundation (TPPF) sent a letter to the Public Utilities Commission of Texas (PUCT) in September voicing concerns about the TX 765-kilovolt (kV) Strategic Transmission Expansion Plan Comparison (STEP) project.
Updated by the Electric Reliability Council of Texas (ERCOT) in August, this plan now entails three 765kV Extra-High Voltage (EHV) electric transmission lines going into the Permian Basin area, which was approved in April 2025 by the PUCT.
Additionally, the plan adds two 765kV EHV transmission line projects to connect the western and eastern loop point-to-point electrical connections.
The TPPF urged the PUCT to halt the eastern portion of the plan and allow necessary public input.
“Never has a transmission buildout of this size and cost been undertaken without explicit approval from both the Commission and the Legislature,” the letter stated. “Decisions with high-level policy tradeoffs should not be left to ERCOT alone and must be considered by both the Commission and possibly the Legislature.”
By ignoring this precedent and by failing to allow public input or legislative approval, ERCOT is acting beyond its legal capacity.
The TPPF letter points out that this plan also has similarities to the costly competitive renewable energy zones (CREZ) project.
The CREZ project was spurred by Senate Bill 20 in 2005, which directed the PUCT to build transmission lines from wind generation sites in rural Texas into urban areas.
Ongoing financing and maintenance costs for those CREZ lines is in the range of $650 million annually, while the larger-scale TX 765kV STEP project has an expected cost in the billions.
According to the TPPF, the cost of the CREZ import lines and their transmission was socialized onto Texans—rather than the large load consumers benefitted by the plan.
Current ERCOT methods allocate transmission costs based on a customer’s average electricity demand during the highest 15-minute intervals of grid usage in the four summer months.
The TPPF explains that large load consumers “may time their use to avoid most of the cost of these lines that were built to serve them.”
Costs to interconnect new generation have risen steadily as new wind and solar projects have come online. The TX 765kV STEP project will allow for more wind and solar interconnections.
The TPPF’s letter demonstrated that transmission costs more than doubled in the 2010s “primarily because of increasing costs to interconnect new generation and by the CREZ lines.”
“If current cost allocation methods continue for the full duration of these projects,” the TPPF warned, the TX 765kV STEP project “will cost over $200 per year for the average residential consumer in most parts of ERCOT,” representing a “nearly 50% increase from current levels.”