The Past and Present of Strategic Transmission Expansion

The Power Line is a newsletter series that reviews key stories in the electric power sector—ranging from grid reliability, transmission issues, and emergent technology and business models. The Power Line will highlight the connections and relevance between the sector’s technical, local, and often esoteric stories to high-level public policy conversations on climate and energy taking place in Washington, D.C.

Amid prospects for strong electricity demand growth, a utility transmission planner evaluates the future of the power grid, writing, “Past experience . . . has proved beyond any doubt that the adoption of higher voltage, higher capacity transmission facilities, as they become technologically feasible, is the most effective approach to meet this need . . . such transmission facilities can be provided without economic penalty and will, in fact, contribute to the achievement of future economies, both in investment and in operation.” No, the year is not 2024. It’s 1969, and American Electric Power (AEP) is undertaking pioneering investment in a new network of high voltage 765-kilovolt (kV) transmission lines.

Political, economic, and technology cycles come and go, but the basic physics of the grid holds true. In the present day, December of 2024, the Midcontinent Independent System Operator (MISO) has just approved a $30 billion portfolio of transmission projects centered on a region-spanning 765-kV “backbone” transmission system. The system will stretch from the western reaches of MISO in Iowa, South Dakota, and Minnesota and integrate into the existing AEP 765 kV system farther east in Indiana and Ohio.

The rationale for such investments in 1969 has not much changed in 2024. Then, as now, transmission system expansion will deliver reliability benefits by introducing more optionality and integration across larger pools of generation assets. The projects will deliver economic value by creating room on the grid for large loads, like datacenters and battery manufacturing plants, and large generation projects, including renewables, nuclear, and combined-cycle natural gas plants. And in both eras, investment in high-voltage projects is a prudent and efficient use of ratepayer dollars, as they obviate the need for many smaller, lower voltage transmission projects that deliver far less transmission system capacity per dollar invested.

Work Still to Do

While MISO and its stakeholders should be applauded for developing and approving this portfolio of projects—MISO estimates 40,000 staff hours and over 300 stakeholder meetings went into it – the work has only just begun. The portfolio of projects will likely need to have its cost allocation methodology approved by the Federal Energy Regulatory Commission (FERC). Any state or other stakeholder with grievances over the process or its outcomes will use this opportunity to file a protest. Assuming approval by FERC, each project must then seek siting approval from the relevant state public utility commission. And, of course, as with any infrastructure, each project in the portfolio must seek and receive relevant state and federal permits, a process that creates the opportunity for litigation and routinely drags on for years. All told, it will be a considerable victory if MISO is able to energize all these new lines by its 2032–2035 target.

The Federal Role

The policy conversation in Washington, D.C., is only just beginning to grapple with the historic surge in electric demand growth now underway. The immense long-term strategic stakes of getting demand growth right should ground and motivate this conversation. The policy objective is to ensure the power sector enables the maximum amount of emergent demand growth rather than constrain, deter, or destroy the economic value creation that demand growth represents. Crucially, this scaling must not sacrifice reliability, globally competitive prices, or continued progress on decreasing emissions intensity.

On transmission issues, the MISO case demonstrates the way states, regional entities like MISO, and the private sector can and will collaborate to scale investment and deploy projects. The federal role is to support and accelerate these processes. Permitting reform is an obvious opportunity for federal policymakers to make a significant positive impact on the entire energy system. Though recent efforts in Congress have stalled, the case for bipartisan progress in 2025 on the issue grows stronger every day. 

On transmission specifically, much of the policy debate centers on related but ultimately tangential questions over energy tax credits and the generation resource mix. High-voltage transmission system investments take decades to develop and then last 80 years or more. These are investments that deliver strategic advantages to the nation on a generational time scale. To let near-term debates over tax policy interfere with long-term institutional development and investment is a poor strategic choice. Given the added context of an AI technology race with China, which is investing at least four times as much a year in its transmission system, the choice rises to strategic malpractice.

Likewise, the resource mix debate misses the fundamental strategic flexibility value proposition of high-voltage transmission. A two gigawatt (GW) or larger combined cycle natural gas plant, a new AP1000 nuclear plant, or a multi-GW wind farm all require high-voltage transmission interconnection that is rapidly becoming scarce. On the demand side, large multi-GW datacenters also require high-voltage interconnection. The Midwest is today reaping the benefits of past grid expansion as they attract massive datacenter investment in large part due to capacity available on the existing 765-kV transmission system. MISO’s new investments create a long-term pathway for the region to attract further investment on both the demand and supply side.

Conclusion

Way back in 1969, these arguments were well understood: the “765-kV [system] is just another step arising from the continuation of the basic philosophy that a strong transmission network, adequate at all times to meet the most severe outage conditions, is indispensable to the successful operation of a fully integrated power system.” The system planners of the past built a high-voltage power grid that delivered economic, social, and strategic value far in excess of its cost. The perennial truth of the matter is clear: the high-voltage transmission system is a national strategic asset. With the United States on the precipice of a new era of computational scaling and increasing electricity intensity of GDP, it is time for policymakers at all levels to relearn this lesson.

Cy McGeady is a fellow with the Energy Security and Climate Change Program at the Center for Strategic and International Studies in Washington, D.C.