Texas is in the middle of building one of the largest transmission infrastructure projects in its history: three 765-kilovolt power line corridors stretching over 1,200 miles across the state. The stated purpose is grid reliability for the Permian Basin. The real story is more complicated, and it involves eminent domain, a generation shortfall nobody’s fixed yet, and a bill that every Texas ratepayer will help pay whether they ever see one of these towers or not.
What’s actually being built
This is ERCOT’s 765-kV Strategic Transmission Expansion Plan, known as STEP, the centerpiece of the state’s Permian Basin Reliability Plan. The plan traces back to House Bill 5066, passed in 2023, which directed the Public Utility Commission of Texas to develop a reliability plan specifically for the Permian Basin. ERCOT published its plan in July 2024, the PUC approved it in October 2024, and by April 2025 regulators had ordered the first 765-kV import paths, a voltage never before used on the ERCOT grid.
What started as a fix for one region has grown into three major corridors, STEP-Permian, STEP-Western, and STEP-Eastern, crossing North, Central, South, and East Texas. Individual projects underneath that umbrella include the Howard-Solstice line running roughly 370 miles from near Fort Stockton to San Antonio, the Bell County East to Big Hill line crossing fourteen counties, and several others still moving through the state’s approval process. A separate but related project, the Potter-Crossroads-Phantom line, would run from Amarillo into New Mexico under a different regulatory track entirely.
The total price tag: roughly $33 billion in capital costs. The lifetime cost to electric customers, once financing and cost recovery are factored in, is estimated at nearly $100 billion.
The generation problem nobody’s solved
Here’s the part that should trouble anyone looking at this closely: Texas is building massive transmission capacity into a region that doesn’t yet have the generation to justify it.
Right now, the Far West zone of the ERCOT grid has only about 2.7 gigawatts of gas generation capacity, 6.3 gigawatts of wind, 6.1 gigawatts of solar, and 2.3 gigawatts of storage. Of the roughly 7 gigawatts of new generation currently in the pipeline for the region, only 2.2 gigawatts has reached a late enough planning stage to have any real certainty of coming online. Meanwhile, ERCOT’s own demand forecast puts Permian Basin usage at over 23,000 megawatts by 2030 and 26,000 megawatts by 2038.
An economic assessment from the Texas Public Policy Foundation put it plainly: ERCOT and the PUC never actually examined whether cheaper, more reliable alternatives, specifically dispatchable generation built closer to where the demand actually is, could solve the same reliability problem with less land taken and lower cost to ratepayers. Their recommendation was a generation-first approach: build reliable capacity near the load, strengthen incentives for dispatchable power, and manage large new loads like data centers directly, rather than running thousand-mile transmission corridors to route around a generation gap that could be closed locally instead.
The counterargument from ERCOT and the utilities is about timing. Transmission corridors take years to permit and site across hundreds of individual parcels of private land. Their bet is that building the wires now means that whenever new generation does come online, anywhere on the grid, it has somewhere to flow, rather than facing a second multi-year bottleneck once demand actually arrives. Whether that bet is worth the cost is exactly what’s being fought over right now.
Why not just build power plants in the Permian instead
It’s a fair question, and it’s the same one legislators and landowners keep raising. A few real constraints explain part of the answer.
Water is one. The Permian Basin is already one of the most water-stressed regions in Texas, and oil and gas extraction there consumes significant water on its own. Traditional gas and nuclear plants need water for cooling, and building large new thermal generation directly in the Permian would compete with the same aquifer strain already driving fights like the one over Kyle Bass’s water export project in East Texas. Air-cooled plants exist as an alternative, but they come with an efficiency and cost penalty.
Nuclear has an even longer lead time problem. New nuclear construction in the U.S. currently takes a decade or more from planning to operation, and cost overruns on recent projects have made utilities and regulators cautious about betting near-term reliability on it.
But there’s a deeper, less-discussed issue underneath both of these: Texas runs an “energy-only” electricity market, meaning generators aren’t paid simply for being available and reliable, the way they are in capacity-market states. Critics argue this market design itself discourages new dispatchable generation from getting built anywhere in Texas, Permian Basin or otherwise, because it doesn’t reward reliability directly. If that’s the real bottleneck, then building transmission into the Permian doesn’t fix the underlying problem. It’s a workaround for a market that isn’t producing enough local generation on its own, funded by taking land from people who had no say in the market design that created the shortfall in the first place.
Who actually benefits
The demand driving this plan is officially framed around oil and gas electrification in the Permian Basin. That’s real. But it’s not the whole picture, and it’s worth being precise about who else is named as a beneficiary in the utilities’ own project materials.
Data centers are explicitly identified, not hidden, not implied, as one of the large loads this transmission capacity is meant to serve. ERCOT’s own planning documents state that higher transfer capability provides a greater range of siting options for both generation resources and large loads, and utility project pages for lines like Howard-Solstice describe the buildout as meeting demand from both oil and gas development and data centers. At one West Texas site alone, a single data center operation has the potential to consume enough power for over a million homes.
So this isn’t a hidden agenda. It’s an openly broad justification, one elastic enough to cover whatever large industrial user shows up next. Oil and gas gets the political cover because it’s the industry Texans are least likely to push back against and the one HB 5066 was originally written around. But the infrastructure being built, and the land being taken to build it, will end up serving whichever large power user arrives with money, and data centers are already named on that list.
There’s also a case to be made that some of this transmission is really about moving existing West Texas wind and solar generation toward the Permian, rather than importing power the region otherwise lacks entirely. One landowner advocate put it directly: the Permian Basin is already rich in natural gas and doesn’t need power imported from across the state at all, which raises the question of whether these lines exist to solve a generation shortfall or to make stranded renewable generation from elsewhere in Texas commercially usable.
The cost lands on landowners first, then everyone else
This project has two separate victims, and they’re not the same people.
The first cost falls on landowners directly in the path. The East Texas expansion alone threatens more than 7,000 acres of private property across Smith and Van Zandt counties. Structures run close to 200 feet tall. In the Longshore Switch-to-Drill Hole Switch project in West Texas, landowner opposition was significant enough that the Public Utility Commission delayed a routing decision in June 2026. In the Bell County East to Big Hill case, landowners specifically sought a pause over concerns that they weren’t given adequate notice before the process moved forward.
The legal tool making all of this possible is eminent domain. Once a utility secures a Certificate of Convenience and Necessity and an approved route, it can generally acquire the easements it needs even over a landowner’s objection. Compensation gets negotiated, and in some cases routes can be contested, but the fundamental right to simply refuse is far weaker than most property owners assume. Even Lieutenant Governor Dan Patrick, not someone who typically breaks with industry-friendly infrastructure policy, said publicly that support for the transmission plan should not come at the expense of private property rights. More than 40 state lawmakers have now signed on to an effort supporting a pause in parts of the buildout while regulators reexamine need, cost, alternatives, and landowner impact.
The second cost falls on every ratepayer in the state, whether or not a single tower ever crosses their land. Texas recovers transmission costs through a mechanism called Transmission Cost of Service, TCOS, which spreads the expense across the entire ERCOT customer base. The nearly $100 billion lifetime cost estimate isn’t what the utilities pay. It’s what gets recovered from ratepayers over the life of the infrastructure, added to electric bills statewide, regardless of whether the demand growth these lines were built for ever fully materializes.
Put plainly: a homeowner in rural North Texas who will never see one of these 200-foot towers, and whose land was never at risk of eminent domain, still pays a share of this project every month through their electric bill. Meanwhile, the primary beneficiaries, oil and gas operations and data center operators expanding into the Permian, bear none of the land-use cost and only a portion of the financial cost, spread thin across millions of ratepayers rather than concentrated on the industries actually driving the demand.
The pattern
This fits the same shape as everything else I’ve written about on this blog. A project gets justified by a need that’s hard to argue against, grid reliability here, public safety with Flock cameras, national competitiveness with the AI data center buildout. It moves forward through a process that individual residents have limited real power to stop once it’s underway. And the people who bear the concentrated cost, landowners losing property to eminent domain, ratepayers footing a $100 billion bill, aren’t the ones capturing the concentrated benefit.
What’s genuinely unusual here is who’s pushing back. This isn’t just landowners and advocacy groups. It’s sitting Republican state senators, the Lieutenant Governor, and more than 40 legislators willing to break with the state’s usual deference to industry-driven infrastructure. When that coalition forms, it’s usually because the on-the-ground impact has become too large to paper over, not because it’s a fringe complaint.
Whether the PUC pauses any part of this remains an open question. What’s not in question is who pays either way.