An Economic Assessment of the 765-kV Strategic Transmission Expansion Plan

And Alternative Approaches to Enable Cost-Effective Growth

WRITTEN BY Brent Bennett, Ph.D.

KEY POINTS

• The need for the 765-kV STEP is driven by an overbuilding of wind and solar across Texas, particularly in West Texas and South Texas, and the plan does not address the need to increase the supply of reliable generation.
• Considerable private investment in reliable generation will be needed with or without new transmission. The 765-kV lines alone will reduce spending on new generation and transmission by no more than 2% through 2038.
• The 765-kV lines will not measurably impact energy prices in ERCOT. Eliminating the lines and building new gas generation near demand will yield almost identical future price outcomes.
• Adding 4-5 GW of gas generation in West Texas and shifting some generation across the other regions of the ERCOT grid could eliminate the need for the 765-kV lines.

EXECUTIVE SUMMARY

This paper argues that Texas policymakers should pause implementation of ERCOT’s 765-kV Strategic Transmission Expansion Plan (STEP) and consider alternatives to minimize the cost and impact of the future transmission buildout. The STEP—which includes the Permian Basin Reliability Plan and related long-distance transmission projects approved through December 2025—would impose nearly $100 billion in lifetime costs on Texas ratepayers and result in irreversible property losses for thousands of landowners across the state. Unlike the Competitive Renewable Energy Zones, which were specifically created by the Texas Legislature in 2005 (SB 20, 2005), the STEP was approved without legislation.

The 765-kV STEP is built on many assumptions that are fundamentally driven to satisfy the desire of large industrial consumers—from oil and gas majors to new data centers—to purchase more wind and solar from across Texas to leverage wind, solar, and battery tax credits and/or to chase their corporate emissions goals. The study from Energy Ventures Analysis contained here finds that the 765-kV lines do not materially change ERCOT’s long-term generation mix and leave future price outcomes largely unchanged when compared with scenarios that rely more heavily on properly located gas generation. The 765-kV lines are not needed to meet demand from Texas households and small businesses. Their primary rationale is to help ERCOT manage a future system with ever more wind and solar power connecting to the grid to meet growing industrial demand.

In other words, the projects in the 765-kV STEP, particularly the 765-kV lines themselves, are a policy choice, not an economic or reliability necessity. ERCOT and the PUC did not examine whether cheaper, more reliable alternatives—especially properly sited dispatchable generation closer to demand—could achieve the same or better reliability outcomes with fewer land-use impacts and lower costs to ratepayers. A generation-first framework that prioritizes reliable capacity near load centers, stronger market incentives for dispatchable generation, and targeted tools to manage large new loads, such as data centers, would better align with the goals of the Legislature (HB 5066, 2023a) and achieve better outcomes for all Texans. In addition to reevaluating the STEP, the Legislature should require a more transparent public planning process for statewide transmission projects and ensure that ERCOT’s planning protects consumers and property owners rather than shifting risk and cost onto the public for the benefit of a narrow set of stakeholders.

INTRODUCTION TO THE 765-KV STRATEGIC TRANSMISSION EXPANSION PLAN (STEP)

The purpose of this study is to assess the economic and reliability impacts of the 765-kV Strategic Transmission Expansion Plan (STEP), which was developed by the Public Utility Commission of Texas (PUC) and the Electric Reliability Council of Texas (ERCOT) in response to legislation that required the development of reliability plans for regions with rapid electric demand growth, specifically the Permian Basin (HB 5066, 2023a). The Texas Public Policy Foundation partnered with Energy Ventures Analysis to perform techno-economic modeling of the 765-kV STEP, a detailed summary of which is attached to the end of this paper. The material below summarizes the modeling results, explains the history of the 765-kV STEP, and assesses alternative policy solutions for building the new transmission.

The map in Figure 1 shows the extent of the 765-kV projects approved to date. In addition to the $17.2 billion estimated cost of the 765-kV lines, ERCOT and the PUC have approved $4.7 billion in local transmission upgrades in the Permian and $11 billion in upgrades that accompany the 765-kV lines in other regions (ERCOT, 2025a, p. 8). If the $33 billion capital cost estimate holds, the lifetime cost of these projects—including financing, equity returns, maintenance, and taxes—will be nearly $100 billion (Bennett & Priacci, 2026, p. 10).

This study covers only projects that have been approved by December 2025, which are the pink, orange, and green lines in Figure 1 (not the teal line). The orange projects are covered by the Permian Basin Reliability Plan (PBRP), approved by the PUC in April 2025, and the pink and green projects are the remaining 765-kV STEP approved by the ERCOT board in December 2025. The study will project the type and quantity of new generation built and the total energy costs to ratepayers in three different scenarios: (1) the base case with no 765-kV lines, (2) the PBRP lines only, and (3) the entire 765-kV STEP. Before we explain those results, it is important to understand the history of the PBRP and the 765-kV STEP, and how the projects these plans propose differ from other transmission projects in ERCOT.

The Transmission Planning Process in ERCOT

Because the ERCOT region has competitive retail and wholesale markets, the PUC cannot dictate the location or type of generation to match demand, as is done in markets with vertically integrated utilities through integrated resource planning. Transmission is the only part of the ERCOT grid that is centrally planned, beginning with ERCOT’s own internal assessments, followed by a stakeholder process and, if needed, the approval of the ERCOT board (ERCOT, 2025b). If a new right-of-way is required, the project undergoes a further layer of review at the PUC, which must grant a certificate of convenience and necessity (CCN) before the transmission utility constructing the project can seize land through eminent domain.

The projects ERCOT is currently reviewing are summarized in the annual regional transmission plan (RTP). Transmission service providers (TSPs) select projects from the RTP to take through the approval process. Projects are divided into four tiers that each require varying layers of review (ERCOT, 2025b).

• Tier 4 projects do not require any input from ERCOT and are typically projects that cost less than $25 million and require no new right of way.
• Tier 3 projects are greater than $25 million, less than $100 million, and do not require new right of way. These projects must be approved by the stakeholder-led Regional Planning Group (RPG).
• Tier 2 projects are the same as Tier 3 projects, except that they require a CCN. These projects must undergo both RPG review and an independent review by ERCOT staff before going to the PUC for final approval.
• Tier 1 projects are any projects, regardless of whether they require a CCN, that are at least $100 million. All of the 765-kV projects fall into this tier. These projects must go through the full stakeholder process and be approved by ERCOT’s board.

Figure 1
Approved and Proposed 765-kV Projects in ERCOT as of December 2025

Note: Figure taken from Report on Existing and Potential Electric System Constraints and Needs, Electric Reliability Council of Texas, December 2025, p. 17 (https://www.ercot.com/files/docs/2025/12/23/2025-Report-on-Existing-and-Potential-Electric-System-Constraints-and-Needs.pdf).

Figure 2
The Transmission Planning Process in ERCOT

Note: Figure taken from ERCOT Trending Topics: ERCOT’s Transmission Planning Process, Electric Reliability Council of Texas, December 2025, p. 5 (https://www.ercot.com/files/docs/2025/08/12/ERCOT_Trending_Topic-Transmission-Planning-Process.pdf).

Since the early 2000s, this process has been circumvented on two occasions. The first was the Competitive Renewable Energy Zones (CREZ or CREZ lines), which the Texas Legislature mandated in 2005 (SB20, 2005) to bring wind energy from West Texas to cities in the state’s eastern half. The PUC designated those zones in 2007 (Lasher, 2014, p. 4), initiated the CCNs for the 72 new circuits in 2009, and completed the CCNs by 2011 (p. 7). By the beginning of 2014, the CREZ lines were completed, totaling 3,600 new linear miles of 345-kV lines at a cost of $6.9 billion (p. 8).

The PBRP and the STEP is the second occasion. The Texas Legislature passed HB 5066 in 2023, requiring the PUC and ERCOT to develop a reliability plan for the Permian Basin that would:

1. Address extending transmission service to areas where mineral resources have been found;
2. Address increasing available capacity to meet forecasted load; and
3. Provide available infrastructure to reduce interconnection times in areas without access to transmission service (HB 5066, 2023a, p. 3-4).

Notably, the legislation does not require ERCOT and the PUC to create long-distance import/export lines like the CREZ lines. It also does not preclude the development of generation solutions needed for reliability, which previous legislation directly mandated (SB 3, 2021, pp. 30-31). There was nothing in the legislative record for HB 5066 that indicated the legislation would lead to statewide transmission projects costing tens of billions of dollars. The entire plan came to be under the auspices of the PUC and ERCOT without any votes in the Legislature, despite potentially costing ratepayers four to five times as much as the CREZ.

Table 1
Comparison of Planning and Approval Processes for the CREZ Lines and the 765-kV STEP Lines

Following the passage of the legislation, ERCOT presented its study to the PUC in July 2024 (ERCOT, 2024), and the PUC approved the final plan in October 2024 (PUC, 2024). The PUC delayed a decision on the high-voltage import lines until ERCOT completed a further study of the 345-kV and 765-kV options (ERCOT, 2025a) and then approved the 765-kV option in April 2025 (PUC, 2025). The ERCOT board then approved the remainder of the 765-kV STEP in December 2025 (ERCOT, 2025c). The result was a $33 billion plan, nearly five times the final cost of the CREZ lines, that was never voted on by the Texas Legislature.

Neither ERCOT’s studies nor the PUC’s actions fully satisfy the statutory requirement to “address increasing available capacity to meet forecasted load,” instead relying on preexisting forecasts for new generation additions that do not include substantially more reliable generation in West Texas.

Neither ERCOT’s studies nor the PUC’s actions fully satisfy the statutory requirement to “address increasing available capacity to meet forecasted load,” instead relying on preexisting forecasts for new generation additions that do not include substantially more reliable generation in West Texas (ERCOT, 2024, p. 5). Given that there is no region of the state where reliable capacity currently exceeds demand (p. 11), the plan assumes that new generation will be built in other parts of the state to provide the “import capacity” to West Texas. That new capacity could be built in West Texas, but the PBRP says that it won’t happen under current market conditions. The PBRP is fundamentally a “build transmission first and hope the generation comes after it” approach to the reliability problems in the region.

Another piece of information missing from these studies is the consumer cost savings test, which the Texas Legislature mandated in 2021 (SB 1281, 2021) and the PUC finalized at the end of 2022 (16 TAC §25.101). By rule, either ERCOT or the applying TSP must show that the congestion cost savings for a project are “equal to or greater than the average of the first three years annual revenue requirement” (16 TAC §25.101(a)(3)(A)(i)(I)(-a-)). In other words, the PUC will not approve a CCN for a new project unless it passes an economic cost-benefit test for consumers. This test can be bypassed for “projects deemed critical to reliability” by ERCOT, and those projects must be approved within 180 days instead of the usual 360 days (16 TAC §25.101(a)(3)(D)). HB 5066 essentially gave ERCOT the ability to deem all the 765-kV STEP as critical to reliability and thereby expedite the approval process. One purpose of this study is to fill in this gap and to assess the economic costs and benefits of the 765-kV STEP.

LOAD FORECASTING AND TRANSMISSION PLANNING FOR THE PERMIAN BASIN

The PBRP was preceded by two transmission planning studies (ERCOT, 2019; ERCOT, 2021) from ERCOT and three different load forecasting studies from Oncor/IHS Markit (IHS Markit, 2020), the University of Texas Bureau of Economic Geology (BEG) (Lin et al., 2022), and S&P Global (Zoba et al., 2022). Oil and gas producers frustrated by the slow pace of improvements and long interconnection wait times were the primary motivators behind HB 5066 (as evidenced by the witness list for the bill, see HB 5066, 2023b), which allowed ERCOT and the PUC to forego the regular piece-by-piece process and approve a whole suite of projects en masse.

The PBRP is unique from these prior studies in calling for long-distance transmission to import power into the region. The only other study ERCOT performed that considered transmission similar to the 765-kV lines was its Long-Term West Texas Export Study (ERCOT, 2022), which was designed to move wind and solar out of West Texas. That study contemplated four long-distance lines—the southern three of which align roughly with the 765-kV lines in the PBRP (p. iv)—and considered voltages above the existing 345-kV export lines. Despite the export study being published in January 2022, just months before the S&P study that formed the foundation for the PBRP, it did not consider the import potential of the lines. In fact, it notes that east-to-west flows were only occurring about 10% of the time across the existing lines in its 2023 model (p. 5).

If one examines the body of literature prior to the PBRP, it is hard to avoid concluding that the 765-kV lines in the PBRP are designed as much to integrate more wind and solar across the entire ERCOT grid as they are to import power into West Texas. Prior to the S&P study, only local transmission upgrades were being considered to serve oil and gas loads in the region, not the long-distance lines. Regardless of the motivation, the Long-Term West Texas Export Study is further evidence that if not for the overbuilding of wind and solar in West Texas, ERCOT probably would never have considered the current 765-kV lines to that region.

The reason ERCOT shifted toward building import lines instead of export lines was a large increase in its demand forecasts for oil and gas production and computing in West Texas. When developing the PBRP, ERCOT chose to ignore the BEG study, which ERCOT commissioned itself, and to rely solely on the S&P study, commissioned by six of the oil and gas companies—Chevron, ConocoPhillips, Devon Energy, Diamondback Energy, ExxonMobil, and Pioneer Natural Resources—that were lobbying for more transmission upgrades. In fact, the PBRP offers a comparison of different demand forecasts for the region but does not even mention the BEG study (ERCOT, 2024, p. 9). This choice was consequential because the S&P projections for electricity demand from oil and gas production by 2035 are more than twice the median projection in the BEG study.

Table 2
2030 Comparison of Electricity Demand Forecasts for Oil and Gas Production in the Permian Basin, in MW

Note: Data from (https://www.ercot.com/files/docs/2022/06/10/ERCOT_West_Texas_Load_Study_Report.pdf), p. 5, and (https://www.ercot.com/files/docs/2023/03/17/Presentation%20to%20ERCOT%20planning.pdf), p. 26.

The primary driver of these differences, as noted by S&P in its comparison of the two studies (S&P Global, 2023, p. 35), is how much each study assumes oil and gas companies will pursue electrification to reduce emissions. The BEG study predicts 9.6 GW of oil and gas demand by 2035 in its high electrification case, (Lin et al., 2022, p. 5), and its highest predictions approach the 12.7 GW predicted by S&P (Zoba et al., 2022, p. 26). Most of the demand in the high electrification scenarios comes from converting gas lift, gathering, and processing activities from gas generators to grid power. In other words, many of the large transmission projects planned for the region (including the 765-kV import lines) might be avoided entirely if oil and gas producers chose to continue relying on the gas and diesel generators they currently use. The new lines are not essential for continued oil and gas production, but rather for the emissions reductions plans that producers are pursuing.

ERCOT’s latest long-term load forecast shows only about 3.1 GW of new oil and gas loads by 2030 (ERCOT, n.d.-a), substantiating our hypothesis that the S&P Global forecast was overwrought. From a transmission planning standpoint, the fact that demand from oil and gas production will likely never reach the levels forecast in the S&P study has been overtaken by the dramatic increase in projected computing loads in the region. However, the PBRP was sold to policymakers as essential to meeting critical oil and gas loads, thereby justifying the substantial landowner impacts of the 765-kV lines and socializing the costs to all ratepayers. If the 765-kV lines are solely needed to meet new data center demand and emissions reduction goals, then the need for the lines and how their cost is allocated must be subjected to greater scrutiny.

ERCOT’s Long-Term West Texas Export Study is further evidence that if not for the overbuilding of wind and solar in West Texas, ERCOT probably would never have considered the current 765-kV lines to that region.

THE 765-KV STEP IS A CHOICE, NOT A NECESSITY

The attached study from Energy Ventures Analysis (EVA) provides further evidence that the 765-kV STEP is a choice, not a necessity, and that other policy choices can enable the 765-kV lines to be avoided entirely. Setting aside the optionality data centers have and assuming all regions of the state experience significant demand growth over the next decade, the study finds that the lines do not change the overall generation mix materially. In the mid-demand cases (i.e., 2038 systemwide peak demand of 148 GW) with and without the 765-kV lines, the amount of generation capacity in ERCOT will more than double by 2038, from 151 GW in 2025 to 340-350 GW in 2038. As shown in Figures 3 and 4, the 765-kV lines only reduce the total amount of new generation needed in ERCOT by 10 GW, or about 3%, and they only reduce the amount of new gas generation in West Texas by 2 GW.

Figure 3
Installed Capacity by Resource Type in ERCOT in 2038 With and Without the 765-kV Lines

Note: Data from Evaluating the Cost of ERCOT’s Permian Basin Reliability and Strategic Transmission Expansion Plans, Energy Ventures Analysis, May 2026, p. 17-18. This data is from the mid-demand case.

Figure 4
Installed Capacity by Resource Type in West Texas in 2038 With and Without the 765-kV Lines

Note: Data from Evaluating the Cost of ERCOT’s Permian Basin Reliability and Strategic Transmission Expansion Plans, Energy Ventures Analysis, May 2026, p. 19. This data is from the mid-demand case.

Table 3
2030 Installed Capacity by Fuel Source, PBRP vs. EVA Study Mid-Demand Scenario, in MW

Note: PBRP data derived following the instructions described in Section 2.1.3 in the PBRP, see ERCOT Permian Basin Reliability Plan Study, Electric Reliability Council of Texas, July 2024, pp. 5-6 (https://interchange.puc.texas.gov/Documents/55718_17_1414013.PDF). EVA data taken from the cases without the 765-kV lines (see pp. 17-19 of the EVA study).

The future generation mix in ERCOT is determined primarily by market design, access, and prices, and more long-distance transmission simply provides optionality for where to locate that generation. A key assumption in the EVA study is that federal subsidies for wind and solar end for units placed in service after 2029, as current policy dictates, and that current supply chain constraints for new gas generation are resolved over the next few years. A change in either assumption, in the absence of market reforms to support more reliable generation, could lead to a greater amount of wind and solar in ERCOT and the need for more transmission. The challenge is that more transmission does not ensure that enough new reliable generation will be built to meet demand and could even discourage such generation if the transmission provides wind and solar favorable market access.

It is important to emphasize that the need for the 765-kV lines is driven by ERCOT’s assumption that Texas will continue to experience overbuilding of wind and solar, leading to new gas generation being constrained.

It is important to emphasize that the need for the 765-kV lines is driven by ERCOT’s assumption that Texas will continue to experience overbuilding of wind and solar, leading to new gas generation being constrained. This assumption is based on the criteria ERCOT uses to incorporate new generation into its planning models, which build on the existing interconnection queue and extrapolate from it. That queue is still predominantly wind, solar, and storage (ERCOT, n.d.-a). As Table 3 shows, ERCOT’s criteria constrain both the quantity of generation and where that generation can be built, especially in West Texas, which forces ERCOT to rely more on transmission to balance the system. The EVA study demonstrates that building more generation assets closer to demand centers enables different outcomes in which new transmission is avoided. It also reflects the fact that demand forecasts and the need for more generation have increased substantially compared to when the PBRP data was compiled in 2024.

Table 4
EVA Study Average Annual Capital Expenditures and System Energy Costs from 2026 to 2038, Mid-Demand Scenario, in Millions of Dollars

Note: Data from the author’s calculations using the data from pp. 11-12 of the EVA study.

Because the 765-kV lines have little effect on the quantity and type of generation built in the EVA model, they also have little effect on total capital expenditures and on market prices. Under the EVA study’s mid-demand scenario, the 765-kV lines have no impact on transmission and generation spending while increasing annual energy costs by about $2 billion. These numbers are much smaller than the model error bounds and are highly sensitive to the type and quantity of generation built, as well as to whether there is enough total generation in the system to meet demand at all times.

The bottom line is that the 765-kV lines do not materially change the economic profile of the ERCOT market, and that the lines can be avoided without a significant impact on prices or reliability for consumers. The consumers who will be affected by the absence of the 765-kV lines are large industrial consumers and data centers seeking greater access to wind and solar power. For everyone else, what ultimately matters for cost and reliability is ensuring the system has enough affordable, reliable generation to meet demand. Transmission lines do not create power and cannot solve that problem.

THE 765-KV STEP SHOULD BE DELAYED AND REEVALUATED

The 765-kV STEP was developed and approved primarily because a wide array of entities stand to benefit from them, namely:

• Transmission companies: The most evident beneficiaries of new transmission are the companies that build the lines, which receive a guaranteed return on equity on their capital expenditures. Assuming the entire $33 billion 765-kV STEP is financed with a 50% debt-to-equity ratio and a 10% return on equity, the transmission companies will receive roughly $25 billion in equity returns (see Bennett & Piracci, 2026, pp. 19-20, for the cost-recovery methodology).
• ERCOT and PUC leadership: Since ERCOT and the PUC cannot control where load and generation are sited, new transmission is one of the only tools they have to manage reliability. Outages caused by transmission congestion or transmission failures, or slow interconnection times for new load or generation, also represent risks that they want to avoid.
• Power plant developers: Any entity that owns or builds power plants is not required to pay for new transmission under current market rules. New transmission lines are especially critical for wind and solar developers who need grid connections across broad swaths of land and high-capacity lines to handle the volume when they are operating at maximum capacity.
• New industrial consumers: This group may not seem like an obvious beneficiary, since the 765-kV lines significantly raise their transmission cost burden, but the new class of data centers cares more about grid access than marginal transmission costs. Also, many consumers seeking to meet net-zero emissions goals want to access wind and solar power via the grid rather than be forced to build on-site gas generation.

The influence of the net-zero goals and federal subsidy-driven actions of many industrial consumers bears emphasizing. Historically, industrial consumers represented by the Texas Association of Manufacturers have been opponents of increased transmission spending because they pay a large share of transmission costs and are highly price-sensitive. However, their representatives supported HB 5066 (2023b) and voted for the 765-kV STEP in the ERCOT stakeholder process (ERCOT, 2025d). Given the primary conclusion of this study—that the main effect of the 765-kV lines is to integrate more wind and solar into the ERCOT grid—it must be asked whether these companies are now supporting more transmission lines because they have decided to put greater priority on consuming more wind and solar power to leverage federal tax credits and pursue corporate sustainability goals.

Unlike the many stakeholders who will benefit from the 765-kV STEP, the people who will be harmed by it—the residential and small commercial ratepayers who will only see the pass-through costs and no market benefits, plus the landowners whose land is seized and devalued—had no direct say in the planning process prior to the CCN applications being filed. For most transmission projects, which do not come anywhere close to the statewide impact, substantial cost, and policy implications of the 765-kV STEP, the existing process is efficient and sensible. But the fact that a plan the size of the 765-kV STEP was instituted without any direct mandate from the Texas Legislature (in contrast to the CREZ lines that were expressly directed by legislation) is a profound mistake that must be corrected. Now is the time for the PUC to halt the CCN applications and allow the Legislature to consider the 765-kV STEP more carefully during the 2027 legislative session.

If the Legislature takes up the opportunity to reconsider the 765-kV STEP, it has four primary alternatives to choose from:

1. Change nothing and let the market adjust to any transmission bottlenecks that occur in the absence of the 765-kV lines.
2. Enact market reforms to better value reliable generation and to encourage that generation to locate closer to the demand.
3. Directly subsidize gas generation in certain locations across the ERCOT grid to provide extra insurance against reliability issues.
4. Require new data centers to be curtailed so that peak demand never rises above a level that outstrips transmission capacity.

The fact that a plan the size of the 765-kV STEP was instituted without any direct mandate from the Texas Legislature is a profound mistake that must be corrected. Now is the time for the PUC to halt the CCN applications and allow the Legislature to consider the 765-kV STEP more carefully during the 2027 legislative session.

These options can be pursued independently or through a combined approach. The primary conclusion of this study is that the 765-kV lines will not materially change the overall generation mix in ERCOT or reduce energy prices. Therefore, the Legislature can delay the lines while alternative options are pursued. What will make a material difference in the ERCOT market are changes in market design, and the Legislature should aggressively pursue market reform options first before allowing ERCOT and the PUC to move forward with the 765-kV STEP or any other statewide transmission plans.

Lawmakers will be tempted to pursue option #3, as evidenced by their creation of the Texas Energy Fund, because direct subsidies provide more certainty that new gas generation will be built and allow them to take credit for what does get built. But permanent subsidies will only exacerbate the central planning problems that led to the 765-kV lines. If the Texas Energy Fund is used for anything, it should be repurposed to protect residential and small commercial ratepayers from the coming increases in transmission and wholesale energy costs, spent down accordingly, and retired as soon as possible.

Option #4 is essentially an extension of the goals of SB 6, enforcing scarcity on one segment of consumers, data centers, to avoid pushing scarcity onto the rest of the grid. As a temporary measure to avoid another central planning problem, policies in this vein must be considered alongside policies to stop overbuilding wind and solar and to increase the supply of on-grid gas generation. ERCOT and the TSPs are already doing their own form of gatekeeping by instituting the batch study process and delaying interconnections for new data centers. Allowing data centers greater market access in exchange for operational flexibility, as proposed by Planning Guide Revision Request 134 (Sharma Frank, 2025), could be a more market-friendly policy than a strict mandate.

Regardless of which option or set of options is pursued, the 765-kV STEP and the massive growth in data center demand have combined to expose the fact that the ERCOT market must be reformed to serve ratepayers first and not special interests. Only the elected representatives of the people in the Legislature can ensure that this happens, and it is time for policymakers to roll up their sleeves and get to work.

Download the full research paper here.

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