Affordability is the key buzzword ahead of the 2026 midterm elections, and no cost-of-living concern has risen to the top of the political agenda like rising electricity prices. The Trump administration and Congress are trying to reform the electrical grid to increase the supply of power to meet soaring demand. Yet the different parties cannot agree on what’s causing the problem, the sources of energy to pursue, or how to overhaul the permitting process to allow more construction. This Washington Examiner series will look at the policy and politics of the grid. The first entry covered the role of renewable energy and the retirement of fossil fuel plants. This second story looks at how transmission lines drive affordability.
Electricity prices are soaring across the country, driven not only by supply constraints but also by increased pressure on the United States’s electric grid from aging infrastructure struggling to deliver that power.
Transmission and distribution infrastructure is the circulatory system of the U.S. grid, with large substations and long-distance high-voltage power lines necessary to transport electricity generated at power plants to consumers nationwide.
These systems support roughly 1.3 terawatts of electric generation capacity nationwide. But with the rapid growth of artificial intelligence, electrification, and domestic manufacturing, that will not be enough to keep up with demand.
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Former federal regulators and utility experts have been warning for months that the grid in its current state will be unable to support significant levels of new generation coming online without substantial changes. And, as necessary as the build-out and upgrading of transmission lines has become, it will come at a cost to consumers.
Transmission is adding to costs
Transmission and distribution expenses have steadily increased over the past decade, nearly doubling since 2014, according to data from the Energy Information Administration.
Meanwhile, generation costs have stayed relatively flat or even declined. As a result, many consider the consistent rise in transmission and distribution costs to be the biggest driver behind higher utility bills.
Todd Snitchler, president and CEO of the Electric Power Supply Association, a trade group representing competitive power suppliers such as Shell, Constellation, and BP, told the Washington Examiner that a significant reason for the rise in transmission and distribution costs has been continuous upgrades to the grid.
Both Republican- and Democrat-led districts have sought to build out transmission to support their infrastructure and energy-related agendas.
In recent years, Democrats have prioritized building out renewable energy projects, such as wind and solar farms, most of which require new transmission infrastructure to connect to the grid. Meanwhile, Republicans, including those in the Trump administration, have sought to upgrade and build out the grid to deliver more electricity to large facilities, such as data centers, to advance AI technology.
“The cost of all the equipment has gone up pretty dramatically, and that’s true across the board,” Snitchler said. “It’s true for generation, it’s true for transmission, it’s true for distribution. The equipment that goes into the substations has gotten more expensive. Labor has gotten more expensive. And so some of those costs have to be countenanced as you look at what the overall price tag for the projects will be.”
At the same time, Snitchler explained, several utilities have prioritized state and regional projects that expand intrastate transmission systems over typically competitive projects, such as inter-grid transmission lines. These smaller projects, while also crucial to modernizing the grid, offer utilities a higher rate of return, incentivizing them to prioritize these noncompetitive projects.
For Paul Cicio, chairman of the Electricity Transmission Competition Coalition, a lack of competitive bidding over transmission projects is at the “core” of rising costs.
“Utilities have a perverse incentive. The more they spend, the higher the profits. And that is — that in lies the problem that consumers have,” Cicio told the Washington Examiner.
A report from the Edison Electric Institute released earlier this year found that utilities were projected to spend nearly $208 billion in 2025, an almost 50% increase from $139.8 billion in 2020. Around 18% of this spending, or roughly $37 billion, is expected to be spent on transmission infrastructure.
Those costs, Cicio said, will trickle down to homeowners’ bills.
“Consumers don’t know what’s going to what’s hitting them,” he said.
Cicio said enforcing competitive bidding can reduce the cost of transmission projects by around 25%, thereby lowering that part of consumers’ electricity bills. However, this would not reverse any of the high costs consumers are already experiencing, he warned.
“It would give relief from future price increases,” Cicio said.
Agreement that more is needed
There is widespread agreement that more transmission and distribution infrastructure is needed to support the rapid demand growth — and it’s needed fast. This includes modernizing and upgrading existing transmission lines to allow for more electricity to pass through, as well as building entirely new lines and substations.
The Edison Electric Institute, which represents all U.S. investor-owned electric companies, warned this fall that it expects its members to spend around $1.1 trillion over the next five years to enhance and expand the grid.
Snitchler told the Washington Examiner that he expects those costs to be recovered by ratepayers, meaning there is no scenario where electricity prices will decrease in the short term.
“That’s the way their model works. If they spend the money, they get to recover it if it’s deemed to be just and reasonable and prudent incurred,” he said of utilities.
The Trump administration has confirmed that upgrading and building out transmission infrastructure is a priority under President Donald Trump’s second presidency.
In October, the Department of Energy finalized a $1.6 billion loan to upgrade and replace nearly 5,000 miles of existing transmission lines across Indiana, Michigan, Ohio, Oklahoma, and West Virginia. The project is expected to save consumers around $275 million in financing costs over the life of the loan.
The onus of tackling transmission does not fall entirely on the federal government. Experts say a variety of players need to work together, including state utility commissions, regional energy regulators, grid operators, and the utility companies themselves.
Several industry groups have also requested that Congress pass legislation to accelerate transmission build-out and enhancement projects by reforming the federal environmental permitting process.
Just last week, the House passed the Standardizing Permitting and Expediting Economic Development Act in a bipartisan vote. The bill would reform the National Environmental Policy Act, the 55-year-old law that requires federal agencies to evaluate the environmental effects of major actions and decisions relevant to their departments.
It remains to be seen whether the Senate will incorporate provisions from the bill into its own permitting legislation. The upper chamber is expected to take up the matter during the first half of next year.
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As utilities move to upgrade the grid, some believe that high transmission prices are a cost consumers will have to live with to bring more generation online to support building out AI.
“The reality is, while high prices might be uncomfortable politically, they’re necessary because high prices send a ‘build signal’ to generators that we need to bring new generation online,” Neil Chatterjee, former chairman of the Federal Energy Regulatory Commission, told the Washington Examiner. “And in the absence of those high price signals, in the absence of those incentives, generators don’t want to build new capacity.”
