Trump DOE Drops Transmission Corridor Tool as $9 Billion in Grid Grants Stays Frozen
Federal siting authority removed and most obligated grid funding stalled, leaving US power markets exposed to widening congestion costs.
The Trump administration has cancelled its proposed National Interest Electric Transmission Corridor designations, removing the primary federal mechanism for overriding state-level resistance to interregional power line siting. The decision, confirmed in department filings during the week of 2026-08-10, strips grid developers of a tool that lets Washington push through high-voltage lines when states object.3
Congestion costs across the US grid hit $12 billion annually, according to DOE's own draft transmission report released Thursday (2026-07-09), which identified interregional links between grid operators as the highest-potential fix for transmission bottlenecks. The agency now lacks the siting authority to act on its own diagnosis.3
The move lands on top of a funding freeze that has immobilised most federal grid investment. Of roughly $11.4 billion in DOE funds obligated to grid infrastructure and resilience — including Grid Resilience and Innovative Partnerships program grants — $9.1 billion remains at risk, with disbursement stalled or timelines extended, according to Canary Media's tracking of federal spending. Only about $400 million in grants have been cancelled outright, while $1.3 billion sits undisbursed but shows no clear sign of delay.5
The political framing arrived before the formal announcements. Russ Vought, director of the White House Office of Management and Budget, declared in a social media post that the administration would cancel "nearly $8 billion in Green New Scam funding," and the DOE termination notices followed shortly after. Canary Media reported that affected projects span 223 grants, all tied to states that voted for Kamala Harris in the 2024 election.5
Reliability-focused projects are caught in the freeze alongside those with a cleaner energy profile. Alliant Energy's Smart Power Automation in Rural Communities project won a $50 million grant in late 2024 to install grid visibility and control devices across 140 circuits serving disadvantaged and tribal communities. Those devices would allow the utility to locate and isolate faults quickly, cutting outage durations in targeted areas by up to 50%. The grant is now at risk.5
Some federal capital is still moving. AEP Texas reached financial close on a $3.26 billion DOE loan through the Energy Dominance Financing Program, a structure the current administration has kept active. For the broader sector, it is the exception.2
The policy inconsistency extends beyond siting and grants. Public Citizen said Tuesday (2026-07-21) that the DOE's streamlined rules for electricity export approvals conflict with the department's own finding that "energy emergencies" across the US justify preventing power plant retirements. Exports can relieve oversupply in some regions while tightening conditions in others; the emergency determination suggests grid margins are already thin in parts of the country.4
Regulators are moving where the executive branch has stepped back. FERC voted unanimously in June to issue show-cause orders under Section 206 of the Federal Power Act to all six RTOs and ISOs under its jurisdiction, directing each to justify or rewrite its large-load tariffs. The orders were triggered by surging data centre interconnection demand, which has overwhelmed queue processes that predate the current load growth wave. Grid operators must now defend their interconnection rules at a moment when federal siting support has been withdrawn.1
The combination leaves US power markets with fewer levers to address congestion. Build-out of new interregional capacity requires federal siting authority to navigate state objections, federal grants to cover early-stage costs, and clear interconnection rules for new load. All three are currently in question simultaneously.3,51
FERC has set no public deadline for the six RTOs to respond to the show-cause orders, and each operator has an incentive to extend the process. If tariff reform stalls while data centre interconnection requests keep accumulating, locational marginal price spreads across constrained corridors will widen. Load-serving entities managing hedging programmes into 2027 face that exposure without a clear federal backstop in sight.1