Eastern Interconnection transmission projects could yield $15.3B in value

Solmar Insights

A recent study has found that building 13 targeted inter- and intraregional transmission projects in the Eastern Interconnection could deliver up to $15.3 billion in net system value by 2050. The initiative, focused in regions including PJM, is expected to lower retail electricity costs, improve system reliability, and support economic and national security objectives.

Study details and methodology

The study, titled “Powering Growth and Affordability: The Role of Transmission in Economic and National Security,” was prepared by S&P Global’s CERA Consulting for the Electricity Customer Alliance, National Grid, and Converge Strategies. The report relies on both base and high demand modeling, comparing scenarios with and without new interregional transmission projects. The base demand scenario produced 12 high-value projects, while the high demand scenario identified 13.

CERA Consulting evaluated potential projects located in the Northeast, PJM Interconnection, the Southeast, the southern region of MISO, and the Southwest Power Pool. The analysis focused on the Eastern Interconnection, a critical grid region that serves over two-thirds of the U.S. population. The study’s modeling considered transmission-constrained and unconstrained scenarios, outlining the impact of expanded interregional links on reliability, affordability, and resilience.

These findings align with recent research from the U.S. Department of Energy and academic sources, which show how targeted grid links allow low-cost electricity to reach high-cost areas, benefiting both consumers and grid operators.

Market drivers for expansion

The increased need for transmission is being driven by load growth, grid reliability challenges, and the integration of new energy resources. PJM and other Eastern Interconnection regions face rising electricity demand, combined with the need to support greater volumes of renewable generation and flexible resources. Policy pushes for national security and weather-related resilience are placing further emphasis on enhanced transmission infrastructure.

Jeff Dennis, executive director of the Electricity Customer Alliance, stated that customers need more transmission, yet face rising costs from local and supplemental projects that do not maximize system-wide benefits. According to Dennis, the study demonstrates the value of reorienting investment toward high-impact projects that unlock the most net benefits across regions, instead of pursuing piecemeal upgrades.

The report also emphasizes that strategic transmission investments can reduce the need for new power plants and localized grid upgrades, delivering cost containment and fewer stranded assets in constrained zones.

Implications for PJM and regional players

PJM Interconnection, covering a major portion of the Eastern United States, stands out as a region positioned to benefit from the recommended projects. The study finds that improved interregional capacity would help address local reliability constraints, lower customer rates, and support more efficient flows of power during periods of extreme weather or peak demand events.

Many of PJM’s recent cost increases have come from local projects delivering limited wide-area value. The new analysis suggests that policy and market participants should look instead to transmission lines that provide larger, quantifiable net benefits over coming decades. Such expansion would enable PJM and neighboring RTOs to better meet resource adequacy and reliability requirements amid rising electrification and renewable buildout.

The call for coordinated regional investment points toward larger projects that bypass some of the parochial limitations facing local solutions, highlighting the need for regulatory and market reforms that enable their approval and construction.

Potential impact on energy buyers and developers

For institutional buyers, developers, and investors, the report’s findings underscore transmission expansion’s direct role in shaping power cost and supply curve dynamics. Lower retail rates driven by efficient transmission capacity could improve offtake economics for large consumers and data center operators, while also unlocking new project opportunities along high-value corridors.

Bottlenecks and constrained interconnection queues have frustrated clean energy development in much of the Eastern Interconnection. By relieving these constraints through regionally optimized transmission, the projects identified could open new markets for renewable and storage assets while enhancing returns for long-term capital deployment.

In addition, the ability to move power economically across regions improves resiliency for corporate buyers and critical infrastructure tenants, who increasingly face both reliability and decarbonization targets in their procurement strategies.

Regulatory and planning challenges ahead

Despite strong valuation in the study, building interregional transmission remains challenging due to permitting, cost allocation, and regulatory hurdles. The current FERC and regional planning frameworks have often prioritized local reliability solutions over cost-shared multistate lines, slowing the pace of progress for projects with the largest systemic benefits.

The study’s customer-centric emphasis may provide new momentum for proposals that prioritize net value, especially as load growth and energy transition drivers intensify. However, major reforms in siting, permitting, and cost allocation mechanisms will likely be required for the recommended projects to be realized at scale.

As the policy debate evolves, energy finance and digital infrastructure investors should track state and federal efforts addressing these bottlenecks, as transmission expansion outcomes will have direct impacts on project timelines, returns, and the addressable market for new capacity in the Eastern Interconnection.

Reporting via the original publisher