A Fight at FERC Over Who Builds America's New Power Lines — and Whether Ratepayers Get to Bid It Out

A Fight at FERC Over Who Builds America's New Power Lines — and Whether Ratepayers Get to Bid It Out State officials are urging regulators to reject a utility plan to suspend competitive bidding for billions in new transmission, just as the data-center boom makes that buildout enormous. Lawmakers from three Great Plains states and the Illinois Commerce Commission are urging federal regulators to reject a utility-backed proposal to suspend competitive bidding for billions of dollars of new power lines planned across the nation's midsection.³ Their central message is that suspending competition would let incumbents build the lines without being tested on price, and that ratepayers would foot a larger bill as a result.³ The fight is over a single procedural question with enormous financial stakes: who gets to build the transmission the country needs, and whether they have to win it in open competition. It matters because the transmission buildout in front of the United States is one of the largest infrastructure efforts in the energy system, and the rules governing how it is awarded determine its cost. Competitive bidding, where independent developers can bid against incumbent utilities to build a line, is meant to hold down prices. Suspending it hands the work to the existing transmission owners by default. When billions of dollars of lines are at stake, the difference between a competitive process and a no-bid award is measured in ratepayer money.³ The backdrop is a grid already struggling to keep pace. US regional grid operators have asked the Federal Energy Regulatory Commission for an extension on a federal deadline to upgrade their transmission infrastructure, after FERC directed all six major regional operators outside Texas in late 2021 to establish upgrade programs.² A system that is behind on the upgrades it has already been ordered to make is one under pressure to build fast, and speed is exactly the argument incumbents use to justify skipping competitive bidding. The tension is between building quickly and building cheaply. The demand driving all of this is the data-center and AI load wave, which has turned transmission into one of the most valuable assets in energy. The convergence of power, AI and data centres is reshaping the investment landscape, illustrated by DigitalBridge's $1.05 billion deal to buy the private power-plant company ArcLight, which owned 20.8 GW of generation and a roughly 15-GW project pipeline, with about 7 GW in the data-center-heavy PJM region.⁴ When capital is pouring into the generation and infrastructure that feeds data centres, the lines that connect them become a prize worth fighting over at FERC. The regulator itself is navigating intense lobbying from those new players. FERC chairman Laura Swett has spoken bluntly to industry executives about the giants of artificial intelligence, the ones with Washington lobbying teams and deep pockets, as Big Tech learns to engage the energy regulator directly.⁵ A FERC that is being courted by hyperscalers and petitioned by utilities and state officials at once is the venue where the cost and structure of the data-center grid is actually being decided. The scale of public money flowing into the grid raises the stakes on getting the rules right. The US Department of Energy finalized a landmark $26.5 billion loan package to two Southern Company subsidiaries, the largest in DOE history, supporting more than 16 gigawatts of new grid resources including gas, nuclear and storage.¹ With sums like that moving through the system, whether transmission is procured competitively or handed to incumbents is not a technicality; it shapes how efficiently billions of public and ratepayer dollars are spent. The case for competition is straightforward, which is why the state officials are pressing it. Suspending competitive bidding removes the one mechanism that disciplines the cost of monopoly infrastructure, and it does so precisely when the volume of new lines is set to surge.³ A no-bid regime during a building boom is the configuration most likely to inflate costs, which is the outcome the Great Plains lawmakers and the Illinois regulators are warning against. The signal to watch is how FERC rules on the utility proposal.³ If the commission preserves competitive bidding, the transmission buildout for the data-center era gets built under cost discipline, even if more slowly. If it suspends bidding to accelerate construction, incumbents capture the work and ratepayers carry the risk of higher costs across billions of dollars of new lines. The grid has to be built either way; the question FERC is deciding is who profits from building it and who pays.^3,2