What STEP is and what it is not
ERCOT’s Strategic Transmission Expansion Plan (STEP) proposes new 765-kilovolt (765-kV) transmission lines to move large amounts of electricity across Texas and strengthen the backbone of the grid. The point is straightforward: demand is rising, and the system needs more capacity to deliver power where Texans need it.
The lifetime cost of the STEP is nearly $100 billion, a steep price for transmission lines that don’t create new electricity. That’s the core problem with the STEP: it doesn’t address Texas’ growing need for reliable generation that is available when wind and solar output declines.
This analysis breaks down what STEP is and what it is not then tests the claims that new 765-kV lines will meaningfully improve reliability or lower prices. The evidence points the other way: the lines reduce combined generation-and-transmission spending by no more than 2% through 2038 and don’t measurably change ERCOT energy prices versus building new gas generation closer to demand.
Finally, it weighs the burden on ratepayers and landowners and outlines cost-effective alternatives, including adding 4–5 GW of gas in West Texas and shifting generation across regions. Subscribe for accountability-driven Texas energy analysis.
Why it matters for Texas reliability
The timing of these projects matters because ERCOT forecasts that peak demand is increasingly exceeding dispatchable capacity, increasing reliance on renewables, or variable wind and solar, during tight hours as ERCOT leaders describe a “new reality” for the Texas grid. STEP aims to address this by enhancing transmission capabilities, but ultimately, the accountability question remains: will new lines be paired with enough firm capacity to keep the lights on in both summer heat and winter cold?
Financial Impact of STEP on Texas Ratepayers and Landowners
What Texans are Being Asked to Carry
The ERCOT 765-kV Strategic Transmission Expansion Plan (STEP) is not just a financial concern; it presents a substantial burden on Texas ratepayers and landowners. TPPF analysis indicates that STEP could cost Texas ratepayers and landowners nearly $100 billion over its lifetime, resulting in irreversible property losses for some landowners without yielding new energy or dispatchable capacity.
Presently, Texans contribute about $1 billion annually to support renewable energy transmission investments, which have cumulatively reached nearly $15 billion since 2010, further straining household budgets. The STEP will add another $3-4 billion annually to transmission spending over the course of the 30+-year life of the projects. Over the past decade, the average household has witnessed transmission costs rise from 30% to 40% of their electric bill, underscoring the need for improved policy decisions that prioritize affordability.
Rethinking the Need for STEP: Alternatives and Viable Solutions
Start with the Goal: Reliability at the Lowest Real Cost
In evaluating Texas’s energy landscape, the primary focus should shift from merely expanding transmission lines to identifying resources that can reliably deliver power during peak demand periods. ERCOT’s 765-kV Strategic Transmission Expansion Plan (STEP) does not increase energy output; it is a transmission plan in search of reliable power, and it will provide an open door for more variable wind and solar that will undermine reliability. As Governor Greg Abbott has emphasized, it is essential to prioritize reliability, especially for wind and solar resources that may not perform adequately during critical times. The increasing reliance on these intermittent sources, which can show significant variability in output, raises concerns about sustainability and our ability to meet growing electricity demand.
Pragmatic Options That Reduce the Need for New Transmission
While transmission lines play a vital role in energy distribution, they cannot replace dispatchable capacity. A more strategic approach would focus on investing in reliable generation sources located near high-demand areas and then assessing transmission needs. This strategy should also ensure that new projects take greater responsibility for interconnection costs, which are currently borne by ratepayers according to TPPF’s energy policy priorities.
Accomplishing this requires:
- Building more gas generation facilities close to demand centers to provide rapid response capabilities.
- Establishing a definitive “deliver in peak hours” requirement for all generators to enhance reliability.
- Limiting transmission investments that primarily facilitate distant, intermittent energy sources.
This approach boosts dependable capacity, clarifies cost accountability, and improves the prospects for affordable electricity in Texas, all while avoiding the disproportionate financial burdens associated with the STEP initiative.
Check out our brand new research paper on ERCOT’s Transmission Expansion Plan
