To comment on the fact that electricity prices are skyrocketing would be to tell you the sky is blue, or that you can find the forks in a kitchen drawer. Everyone knows this because everyone feels it.
National Retail Electricity prices have risen so quickly that they’ve actually outpaced inflation and natural gas since 2022. This isn’t bad luck; electricity prices, such as many other commodities, are the result of specific and deliberate policy choices.
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A simple reality is that high demand with low supply increases prices. The United States is expected to face an energy shortage of at least 175 gigawatts by the year 2035. For context, the largest power plants in the country produce only about 2 to 3 gigawatts of electricity. Even if we could permit a new generation at this scale, the electricity won’t get where it’s needed without an increase in transmission capacity.
The U.S. currently utilizes only roughly 50% of the generation capacity we’ve built. In other words, half of our power plants simply sit idle because the energy they could produce has no way to be transported. This is a criminal waste of money and acreage. We refer to this as transmission congestion, and it has a big effect on both prices and land use.
When you see your electric bill increasing year by year, know that you are feeling the effects of transmission congestion. Additionally, when companies that use a lot of power have increased electricity costs due to long-distance transmission, those costs are passed on to you as the consumer, as demonstrated by a report by Lawrence Berkeley National Lab.
According to this report, a single 1000-megawatt transmission link could save consumers $135 million every year. Congestion is most pronounced during periods of high volatility and extreme weather events; 50% of the studied transmission congestion value derives from just 5% of hours, meaning that the massively high costs associated with extreme events can be significantly allayed with increased transmission. Even without these rare events, increased transmission can result in an approximate 50% reduction in costs.
The Trump administration’s Department of Energy also corroborated these findings in July by stating: “Across the U.S., transmission congestion increases the average wholesale price of electricity, with congestion costs estimated to have been $11 billion in 2023.”
A study from Stanford found that most transmission lines are underutilized, meaning they can carry more electrons and still be well below their thermal limit. This may make it seem like we don’t need more transmission lines until we fill the ones we currently have, but it isn’t that simple. Stanford instead argues that key bottlenecks in our transmission system must be filled to scale in a reliable way.
The only way to address this is to alleviate pressure on bottlenecked areas that are restricting the larger grid from receiving power. Emerging technologies such as reconductoring and dynamic line ratings help us get there, but there are nowhere near enough to solve the problem. Building more intermediate transmission capacity can increase the utilization of existing lines and decrease the need to continually build duplicative generation and distribution lines.
Many people believe that increased transmission is only necessary for wind and solar plants, but this is not always the case. The Bayshore-Lallendorf 345KV line was meant to facilitate the 1,440 MW gas facility in Lucas County, Ohio. The project dropped out of the queue after being slapped with a nearly $1.3 billion price tag in transmission upgrades needed to connect the line. The Gordonsville 230KV line, meant to connect to the nearly 1300 MW gas facility in Orange County, Virginia, would have had to pay more than $300 million in transmission costs before it could connect to the existing system.
Transmission lines are currently paid for through cost allocation, in which costs are automatically spread across users deemed to benefit from the new lines. This system is defined as a “beneficiary pays” system, where costs must be roughly commensurate with benefits. These are generally limited to increased reliability, reduced congestion, and access to cheaper power.
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Cost allocation as a system is not new, nor has it been controversial. We’ve been using it in almost every corner of the country since 1935. Republicans are rightfully concerned that if increased transmission runs through their districts, it will incur a financial burden on their constituents. The Trump administration recently convened a summit of utility companies and data center developers to solicit voluntary pledges stating the increase in electricity demand won’t incur extra costs for other consumers. As long as Congress keeps a tight hold of which benefits legally qualify for cost allocation, no unnecessary costs will be incurred.
Increased transmission does not need to be hyperpolarized. It is an essential function of modern life that requires planning, studying, and discussing intentionally and unemotionally. In so doing, we can create a system that benefits everyone instead of picking winners and losers.
Taylor Tougaw is the director of Government Affairs, with a focus on energy, public lands, and wildlife, at the American Conservation Coalition Action. He previously worked in the House of Representatives for six years.
