How much could new transmission save customers? About $15.3 billion, study finds

As electricity affordability has become top of mind for customers, a new study finds that the solution may have been in front of us the whole time: transmission investment. The study, “Powering Growth and Affordability: The Role of Transmission in Economic and National Security,” was prepared by CERA Consulting, the consulting arm of S&P Global Energy, and commissioned by National Grid, the Electricity Customer Alliance (ECA), and Converge Strategies. The analysis examines how transmission investments can help meet rising demand across four regions of the Eastern Interconnection: the Northeast, PJM, SERC, and SPP/MISO South. It argues that building transmission is “consistently one of the most cost-effective approaches” for meeting new electricity demand, and that investments that connect regions deliver the greatest value to consumers. And that value? It’s no small sum- estimated to be north of $15 billion. The authors of the study stressed that electricity demand could skyrocket by 2035, with 374 terawatt-hours (TWh) of new demand and 45 gigawatts (GW) of peak load driven by data centers, manufacturing, electrification, and other large energy users connecting to the grid. 50% of that growth is expected to occur in just two regions: PJM and ERCOT. Existing transmission constraints are making it harder to connect communities and businesses to lower-cost power. If nothing is done, costs will continue to rise for consumers, and reliability risks will increase, the study argues. How new transmission benefits customers The study found that interregional transmission, when combined with robust regional transmission, provides the greatest value, with customer savings reaching up to $15.3 billion until 2050 – two to three times higher than scenarios without interregional connections. Transmission can help reduce the need to build more expensive local generation by enabling regions to access lower-cost electricity from elsewhere on the grid. The authors argue that these cost benefits could “set the stage” for lower customer rates, with PJM customers potentially seeing the largest gains. Additionally, the study argues that transmission becomes even more valuable in the future when energy demand rises, which could help manage uncertainty surrounding AI, data centers, advanced manufacturing, and industrial growth. Across every scenario studied, transmission delivers more benefits than costs, returning up to $1.89 in system-wide benefits for every dollar invested, the study found. PJM’s benefit-cost ratio in an unconstrained base demand case is 2.1, representing $9.8B in net present value to be captured in the region- the most in any studied. Since PJM is home to the largest concentration of data centers globally and also hosts a whopping 75 major military installations, transmission buildout is particularly critical to national defense. What about security? New transmission can provide more than just cost benefits: the authors argue that interregional transmission offers critical backup capability during emergencies, allowing regions to support one another with electricity imports when local systems are strained or when disruptions occur. Additionally, the study argues that the grid serves as a foundational platform for military readiness and operations, as the defense industrial base, including shipyards, aerospace manufacturers, technology suppliers, and weapons producers, cannot function without reliable electric infrastructure. A stronger transmission system can also enhance resilience and reduce vulnerabilities from extreme weather, cyber threats, and physical attacks, the authors said. “The electric grid is critical national security infrastructure,” observed Jonathon Monken, senior partner at Converge Strategies. “Every command center, shipyard, and defense manufacturing site within this study’s geographic footprint runs on commercial power. Strengthening interregional transmission ensures power reaches what matters most, keeping our interconnected defense operations reliable when energy challenges emerge.”