Texas Holding Consumers Hostage for $33 B in a High-Voltage Heist

Texas ratepayers are on the hook for a $33 billion high-voltage transmission expansion that critics call a classic power grab—funneling guaranteed returns to transmission monopolies, condemning thousands of acres of private land, and primarily enabling more intermittent wind and solar that many of today’s assets won’t economically or physically outlast another decade.

The Electric Reliability Council of Texas (ERCOT) 765-kV Strategic Transmission Expansion Plan (STEP), including the Permian Basin Reliability Plan elements, would add roughly 2,468 miles of new 765-kV lines (the highest voltage common in North America), 649 miles of new 345-kV lines, hundreds of miles of lower-voltage upgrades and conversions, and about 3,400 miles of new right-of-way. Construction cost estimates sit at approximately $32.99 billion; lifetime costs including financing, maintenance, taxes, and returns approach $100 billion.

This did not start as a statewide mandate. 2023 legislation (HB 5066) directed ERCOT to develop a reliability plan for the Permian Basin, where oil-and-gas operations and emerging data-center loads have driven real demand growth. Somewhere along the way, regulators and planners transformed a targeted fix into one of the largest infrastructure builds in state history—without a direct legislative vote on the full STEP, unlike the earlier Competitive Renewable Energy Zones (CREZ) lines that cost about $6.9 billion to build (roughly $20 billion lifetime) and were explicitly authorized.

Finance: Ratepayers Foot the Bill, Utilities Collect Guaranteed Returns

Transmission costs in ERCOT are socialized. Transmission Service Providers (TSPs such as Oncor, AEP Texas, CenterPoint, and others) recover their Transmission Cost of Service (TCOS) through a postage-stamp-style system allocated largely via the Four Coincident Peak (4CP) method—based on contribution to the four highest summer system peaks—then passed through to distribution providers and ultimately retail customers. Residential and small commercial customers often see these as volumetric or fixed charges that have already risen sharply; transmission-related charges have climbed dramatically since the CREZ era.

Because the investments enter the rate base, TSPs earn an authorized return on equity (ROE). Recent Texas decisions have put authorized ROEs in the mid-to-high 9% range (e.g., around 9.7% for major players).

Independent analysis from the Texas Public Policy Foundation’s Life:

Powered project estimates transmission companies stand to collect about $25 billion in equity returns over the life of the STEP projects—paid by ratepayers. Large industrial loads (data centers, some oil-and-gas operators chasing sustainability metrics and federal tax credits) gain access to distant wind and solar; ordinary Texas families and small businesses absorb the costs with little offsetting benefit.

Critics note the plan was labeled “critical to reliability,” which helped exempt it from ordinary consumer cost-benefit tests that Texas law otherwise requires for transmission. Certificate of Convenience and Necessity processes have moved far faster than CREZ-era timelines, compressing public notice and landowner input.

Questionable Benefits and Grid RealitiesProponents, including ERCOT planners and the utilities that will build the lines, argue 765-kV technology moves more power farther with lower losses, improves West Texas export limits (modeled gains of roughly 27% versus lower gains for an all-345-kV alternative), enhances transfer capability by hundreds to thousands of megawatts in key corridors, reduces system losses by about 5% annually, and supports long-term load growth from the Permian, data centers, and electrification. ERCOT’s own comparison showed the 765-kV STEP costing only about $2.24 billion more upfront than a pure 345-kV plan (narrowing further after accounting for construction outages), with claimed annual production-cost and consumer-energy-cost savings.

Independent techno-economic modeling by Energy Ventures Analysis for Life:

Powered reaches a sharply different conclusion. Using detailed capacity-expansion and dispatch modeling out to 2038–2050 under varying demand scenarios:

• Total generation capacity roughly doubles either with or without the lines.
• The lines reduce the need for new generation by only about 3% (roughly 10 GW).
• There is no meaningful improvement in consumer energy bills or overall energy mix beyond enabling more wind and solar.
• Building additional natural-gas generation near West Texas load centers achieves comparable reliability outcomes at similar or lower total system cost, without the massive transmission outlay or land condemnation.
• Price impacts fall within model error bands; the lines do not pass a rigorous consumer cost-savings test.

In short, the lines move power—they do not create firm, dispatchable capacity.

ERCOT already faces congestion in renewable-rich zones, stability challenges with high inverter-based resources, and the classic “duck curve” and evening-ramp problems created by solar and wind. Adding ultra-high-voltage highways primarily to wheel more intermittent generation deeper into the system risks locking in higher overall costs without solving the underlying reliability gap: insufficient flexible, on-demand power near load.

Wind and Solar That Won’t Last Another Decade—and the Stranded-Asset Risk

Texas leads the nation in installed wind and has surged past California in utility-scale solar. Much of the early wind fleet arrived via CREZ (completed around 2014). Onshore wind turbines typically carry design lives of 20–25 years; solar PV modules are often warranted for 25–30 years but experience annual degradation and inverter replacements far sooner. A substantial portion of Texas’s older wind capacity has already reached or is approaching the 20-year mark, prompting repowering projects that replace nacelles, blades, and drivetrains to extend life and capture remaining tax credits.

Federal production and investment tax credits that underwrote much of the build-out are scheduled to phase or change; modeling that assumes subsidies largely expire after 2029 shows wind and solar additions slowing as the system needs more firm capacity for evening peaks. Building $33 billion in transmission optimized for today’s renewable geography creates a classic stranded-asset risk: if older wind and solar retire, underperform, or require costly repowering just as the 765-kV lines come online (many segments targeted for 2030–2032), ratepayers will still be paying for the wires long after the generators they were meant to serve have changed or disappeared. The lines also facilitate continued interconnection of new intermittent resources whose capacity factors and effective load-carrying capability remain far below those of gas or nuclear.

Opposition Mounts

More than 40 state lawmakers signed an amicus brief urging the Public Utility Commission to pause and fully evaluate need. A marathon Capitol hearing drew more than 200 landowners, ranchers, and officials; country singer Tanya Tucker testified in opposition and closed by singing part of “Texas (When I Die).” Landowners face eminent-domain takings, property devaluation extending well beyond the easement corridors, and inadequate notice on shifting routes. Recent statements from Lt. Gov. Dan Patrick and Sen. Charles Schwertner have called for rejection of applications pending reforms ahead of the 2027 legislative session.

Texas does need a stronger grid. Load growth is real. High-voltage transmission has legitimate uses. But a $33 billion (construction) / ~$100 billion (lifetime) build-out that doubles the nation’s 765-kV mileage, is not legislatively mandated, bypasses ordinary cost-benefit scrutiny, guarantees tens of billions in utility returns, condemns private land, and primarily serves to wheel weather-dependent generation whose existing fleet is already aging out looks less like prudent planning and more like a high-voltage heist at the expense of ordinary Texans.

Policymakers should pause Certificate of Convenience and Necessity approvals, force a full legislative review in 2027, require rigorous comparison of local dispatchable generation alternatives, and reform cost allocation so that the beneficiaries of new transmission—not every residential ratepayer—bear a larger share. Until then, Texas consumers remain hostages to a plan whose benefits are, at best, highly questionable.

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