It is widely agreed that the US needs more inter-regional transmission, but the sector is beleaguered by problems with permitting and cost allocation.

Attendees at Platts Global Power Markets by S&P Global in Las Vegas said the US requires a combination of macro legislative help and broad input from the power industry to build out the hundreds of gigawatts of new transmission capacity that its grid needs.

According to Infralogic data, US transmission peaked at more than USD 15bn of investment in 2022, practically flatlining so far this year.

The sector continues to make headlines though, most recently with the news that Longview Infrastructure, a new transmission development and investment platform, secured an equity commitment from Stonepeak.

“There’s been a significant amount of progress being made on transmission,” Andre Porter, senior vice president, chief strategy officer and general counsel for MISO, said at the conference. “You’ve seen conversations around the awareness of the need for transmission starting first with what the actual drivers are for that transmission.”

If transmission is going to follow load growth, there must be consensus on what that load growth is going to be, Porter said.

“To the extent that you don’t have alignment that there is going to be load growth, you’re going to debate this for years,” Porter said.

Debate around data center load growth has subsided, Porter said. But other debates, such as economy-wide electrification and electric vehicle adoption, persist.

“The other big challenge, as you think about transmission, is going to be to find a way to ensure that you can have cost allocations for those transmission [assets] equally spread,” Porter said.

Utilities are under pressure to lower customer bills but doing so while increasing investment is rare in the utility world, Raj Mahagaokar, chief financial officer at transmission developer Grid United, said during a panel discussion.

Grid United is jointly developing the USD 3.2bn North Plains Connector project with Berkshire Hathaway Energy. The project, in North Dakota and Montana, is scheduled to start construction in 2028.

“Big transmission really is a public good,” Mahagaokar said, adding that the promise of lowering bills over time is essential. “All the stuff we’re talking about has to get paid for by customers.”

Himanshu Saxena, CEO of Lotus Infrastructure Partners, said that the firm’s transmission project in the US southwest had essentially no opposition from tribal or environmental groups because of robust community engagement, but still took eight years to permit.

The 14 months the project took to build the power utility line and substation should mirror permitting time, Saxena said.

“Everybody wants it,” Saxena said of transmission, but federal-level discussions around streamlining transmission projects, such as through simplifying NEPA, have amounted to little more than talk. “Investors like us who can invest billions of dollars in infrastructure, are scared at times picking up transmission projects because it’s hard for us to know whether it’s going to be five years or 15 years to develop those.”

Twenty-year cycles for transmission addition when the load is here and now are untenable, Saxena said. He pointed to the firm’s investments in the transmission system under the Hudson River, a 660 MW high voltage dc line currently supplying about 5% of New York City’s power needs.

According to previous reporting, the Hudson asset was re-energized after the original submarine cables were replaced in their entirety with cross-linked polyethylene cable technology.

“There was almost a billion dollars of system upgrade costs that was allocated to us years after we were built,” Saxena said. “Suddenly you are stuck with a cost that you had never underwritten.”

Those issues, cost allocation and permitting, are going to reduce participation in the space until they are addressed, Saxena said.

“It is a riskier proposition than investing in any other asset class within the power space,” Saxena said of transmission. “It is not for the faint of heart.”