Texas last changed transmission voltage class in the early 1960s. ERCOT's own Trending Topic on the 765 kV plan makes the comparison deliberately: "Over 60 years ago, Texas utilities joined together in the early 1960s to plan and build the first 345-kV circuits in Texas. The change was described as building a 'power highway' to make ample electricity available to meet growing requirements."
Sixty-odd years later the same argument is being made one voltage class up. This is what has actually been decided, what it costs, and what remains open.
The decisions, in order
October 2024 — the PUCT approved the Permian Basin Reliability Plan, "irrespective of the voltage level." The what was settled before the how.
January 2025 — ERCOT filed the 2024 Regional Transmission Plan 345-kV Plan and Texas 765-kV Strategic Transmission Expansion Plan (STEP) Comparison with the PUCT, as "an assessment of the relative reliability and economic benefits of constructing a new 765-kV transmission infrastructure rather than simply expanding the existing 345-kV network."
24 April 2025 — "the PUCT approved the region's first 765-kV transmission lines to meet the Permian Basin's rapidly growing power needs."
9 December 2025 — ERCOT's Board of Directors "voted to endorse two separate 765-kV EHV transmission projects involving multiple Transmission Service Providers," each "a subset of the STEP Core Plan":
- the AEP Texas, CPS Energy, Oncor and CNP Texas 765-kV STEP Eastern Backbone Regional Planning Group Project; and
- the Oncor and AEPSC Drill Hole to Sand Lake to Solstice 765-kV Line Regional Planning Group Project.
Both, ERCOT notes, "are based on North American Electric Reliability Corporation (NERC) and ERCOT reliability planning criteria" — reliability-driven, not economics-driven, which matters for how they are approved and recovered.
Endorsement is not permission to build. Routing and need are settled at the PUCT through Certificates of Convenience and Necessity, and ERCOT is explicit that "specific routing of any new transmission infrastructure is determined by the PUCT as part of the Certificates of Convenience and Necessity (CCN) process with TSPs."
The forecast that made it necessary — and how it got that big
The single most consequential number in the whole exercise is not a cost. It is a load forecast, and it exists because the legislature changed the rules for producing one.
ERCOT explains that House Bill 5066, from the 88th Legislative Session in 2023, addressed a structural blind spot: "Previous planning rules did not allow ERCOT to include anticipated loads in planning studies unless they had executed an interconnection agreement with a Transmission Service Provider, recognizing that TSPs were talking directly to customers about their expectations to build in Texas. With the addition of new HB5066 forecasting rules, the load forecast for ERCOT transmission planning grew to more than 150 GW for 2030."
More than 150 GW for 2030. That is the number the 765 kV plan is sized against, and it is a number that only exists because Texas decided planners could count load that had not yet signed an interconnection agreement.
Anyone reading that figure should also read ERCOT's own sensitivity: "ERCOT performed a sensitivity analysis with a reduced load level (~20 GW less overall load) to assess the impact on the need for the 345-kV plan and the TX 765-kV STEP if less-than-forecasted load materializes. Results showed major portions of the 345-kV plan and the TX 765-kV STEP will still be needed to meet a reduced demand forecast."
That is a real answer to the obvious objection, and it is a bounded one. It tests roughly 20 GW of downside, not 60. Nobody should read it as saying the plan survives any demand outcome.
The cost comparison, and the three numbers that matter
ERCOT's comparison is unusually legible:
"Based on generic cost estimates, the estimated initial new construction cost of the TX 765-kV STEP ($32.99 billion) is comparable with the 345-kV plan ($30.75 billion) – a difference of $2.24 billion. When the estimated additional cost required to minimize construction outages, to maintain system reliability, and to ensure timely completion of certain major upgrades to complete construction of the two options are considered, this cost difference diminishes to $1.35 billion. Additionally, economic analysis noted the 765-kV plan produces approximately $230 million more savings in consumer energy cost each year compared to the 345-kV plan."
Three numbers, and the relationship between them is the whole argument:
- $2.24 billion — the headline premium on construction cost alone.
- $1.35 billion — the premium once the cost of building the 345 kV plan around a fully-loaded existing system is counted.
- ~$230 million per year — the congestion-driven consumer energy saving.
On those figures the premium pays back in something under six years of energy savings, before counting the loss and reliability benefits. That is the case ERCOT made, and it deserves to be stated as ERCOT's own estimate rather than as a fact: these are "generic cost estimates" and an "economic analysis," and transmission cost estimates move.
The physical argument: fewer rebuild miles
The non-financial argument is arguably stronger, and it is about construction feasibility rather than elegance.
"While the TX 765-kV STEP includes approximately 400 more miles of new right-of-way (ROW), it significantly reduces the need to upgrade or rebuild current infrastructure by 1,400 fewer miles compared to the 345-kV plan."
ERCOT then names why that matters: "The need for fewer upgrades is a benefit for construction outages in the long-term as today's system fully utilizes its current capability and makes existing upgrades more difficult and expensive."
Rebuilding an in-service 345 kV line means taking it out of service on a system that has no slack. Four hundred extra miles of new corridor, in exchange for 1,400 fewer miles of surgery on a grid that is already fully loaded, is a trade about outage risk during the build — not about steel.
The other physical benefits are the textbook ones: "765-kV transmission lines significantly reduce power losses by transmitting electricity at a higher voltage and can reduce annual systemwide transmission losses," and higher voltage moves power from "resource-rich regions to load centers, such as the Dallas-Fort Worth, Houston, San Antonio, and Corpus Christi areas."
Is this exotic technology? No
ERCOT addresses the supply-chain worry head on: "While the 765-kV voltage level will be new to the ERCOT Region, it has been used in other parts of the United States since the 1960s and in many foreign countries. System operators Southwest Power Pool (SPP) and the Midcontinent Independent System Operation (MISO) have proposals for building 765-kV lines in non-ERCOT parts of Texas in coming years. Preliminary discussions with 765-kV equipment manufacturers, as well as the TSPs who would build the infrastructure, indicate the supply chain timeline for 765-kV equipment is similar to that of 345-kV equipment."
Similar lead times to 345 kV equipment is the claim. It is a preliminary claim from preliminary discussions, sourced to manufacturers and TSPs, and it is the assumption most worth watching over the next few procurement cycles, because a slip in transformer or reactor lead times moves in-service dates directly.
What it means for spending in Texas
"Both the 345-kV plan and the TX 765-kV STEP are estimated to require approximately $5 billion per year of transmission project investment over the six-year planning horizon compared to an average of over $3 billion per year of transmission projects endorsed in the past three years. In 2024, $3.78 billion of new transmission was endorsed by the ERCOT Board of Directors."
Roughly a 30% step up in annual transmission build, sustained for six years. ERCOT's note on recovery is the part consumers should read: "Transmission investment costs are typically recovered over a 30- to 40-year period by TSPs. As demand grows and more customers are connected to the transmission grid, costs are distributed across the increased customer base."
That is true, and it contains the load-forecast risk in one sentence. The denominator is the new demand. If 150 GW by 2030 arrives, the per-customer arithmetic works. If it substantially does not, the same capital is spread over a smaller base — which is precisely why the 20 GW sensitivity is the most important page in the file.
What a developer or a large load should take from this
Generation west, load east. The STEP core plan exists to move Permian and West Texas output to the DFW, Houston, San Antonio and Corpus Christi load centres. A generation project sited on a planned 765 kV path is being sited on a very different congestion future than one that is not.
Congestion is the payback, so congestion is what changes. If the ~$230 million a year of consumer energy savings materialises, it materialises as basis compression between west and east. Any merchant revenue model underwritten on today's congestion rents on those paths should be run again against a post-765 kV world.
Reliability-driven means it goes ahead differently. Both endorsed projects were justified on NERC and ERCOT reliability criteria rather than on economic benefit, which is a more durable footing at the PUCT than a benefit-cost ratio.
The CCN process is where the schedule actually lives. Endorsement by ERCOT's board is a milestone; routing, landowner proceedings and the CCN are where transmission projects in Texas gain or lose years. ERCOT's 2025 Report on Existing and Potential Electric System Constraints and Needs is the place to track what remains constrained in the meantime.
Related on this site
- Live ERCOT grid conditions — load, fuel mix and real-time prices
- ERCOT's large-load interconnection standard — the load side of the same build-out
- Wind farms in Texas and natural gas power plants in Texas — what is already connected out west