US Commits $1.3B for Power Lines in West, Northeast

The Biden administration said on Monday it is committing up to $1.3 billion for three new power lines crossing six states in the U.S. West and Northeast, to help bolster the aging grid and bring renewable power to more customers.

The money will not fund direct construction of the lines. Rather, the Department of Energy, or DOE, will seek to reduce the financial risks of companies building the lines by offering so-called capacity contracts authorized by a $2.5 billion program in the 2021 bipartisan infrastructure law.

Under the contracts, the DOE can buy up to 50% of the capacity of transmission lines for up to 40 years and sell the contracts to recover costs.

Energy Secretary Jennifer Granholm told reporters in a call the arrangement allows the DOE to be an anchor tenant of the lines, "which gives the developers the confidence that they can actually build and that there will be offtake" of the power from the lines.

Last year, millions of Americans lost power after 18 natural disasters slammed U.S. power lines and power outages cost American businesses $150 billion.

The DOE says the U.S. needs to more than double the capacity of the power grid, parts of which are more than a century old, to realize President Joe Biden's climate goals, including reaching 100% clean electricity by 2035.

The projects supported by the capacity contracts include the proposed Cross-Tie 1,500-megawatt (MW) line connecting existing transmission systems in Utah and Nevada to improve grid reliability and resilience.

The Southline Transmission Project is a proposed 748 MW line to help unlock solar and other renewable power in New Mexico and deliver it to growing markets in Arizona that currently rely on fossil fuel-generated power. Construction on the two projects is expected to begin in 2025.

The Twin States Clean Energy Link is a proposed 1,200 MW line intended to boost the capacity of the New England power grid and provide access to clean energy, including hydropower from Quebec, Canada. The line, construction of which is expected to start in late 2026, is expected to be able to transmit power to Canada as offshore wind power capacity expands in New England.

As Congress struggles to pass legislation to bolster the power grid, the Energy Department also released a study that said more needs to be done, including boosting interregional transmission -- the ability to move power across regions of the country. By 2030, it said, large deployments of interregional transfer capacity are needed between the Delta and Plains regions, Midwest and Plains, and the Mid-Atlantic and Midwest.