DOE Draft Report Ties $12B Congestion Costs to Transfer Capacity Gaps
Interregional transmission links offer the biggest bang for the buck in easing grid congestion, Utility Dive reports, citing a draft National Transmission Needs Study released by the U.S. Department of Energy on July 9. The study found transmission congestion cost the U.S. power system $12 billion in 2024, up from $11 billion in 2023, though still below the $21 billion peak in 2022 driven by high gas prices and severe weather. DOE expects congestion costs to keep climbing.
The report flags specific corridors with the highest value for added transfer capacity: links between ERCOT and its neighbors, between the Eastern and Western interconnections, between NorthernGrid and WestConnect in the West, and between ISO New England and the New York ISO. The Southeast, which lacks an organized wholesale market, could see roughly $10/MWh in average savings from more capacity with neighboring regions, with the highest-value links identified between Southern Co. and Florida, Duke Energy and PJM, and TVA and MISO’s southern region. DOE noted the Southeast is the only region that hasn’t addressed at least one of the four transmission need categories it tracks. Between 2016 and 2024, the U.S. built 150 miles of interregional transmission annually, with incumbent utilities developing 98% of all new lines; ERCOT led in circuit miles built (2,400) while PJM’s eastern region spent the most annually ($3.5 billion). DOE is accepting public comments on the draft through September 7.
What It Means for Subcontractors
- Line and E&I contractors working in ERCOT, PJM’s eastern region, and the Southeast (Southern Co./Florida, Duke/PJM, TVA/MISO corridors) should start pricing transfer-capacity upgrade and reconductoring work now, since DOE’s findings build the regulatory case for retrofits ahead of formal RFPs.
- Because incumbent utilities built 98% of transmission from 2016-2024, subcontractors should focus business development on utility MSA/prequalification lists (ERCOT, PJM, ISO-NE) rather than waiting on independent transmission developer bids.
- The comment period runs through September 7; engineering and construction firms with interregional project experience should submit input now to shape which corridors get prioritized in the next three-year planning cycle.
