New Study Finds Competitive Bidding on Texas's Largest Transmission Lines Could Save Ratepayers Up to $22 Billion

Aurora Energy Research finds that opening ERCOT's planned high-voltage buildout to competition could cut construction costs by $3 billion to $9 billion, if the process includes binding cost caps and public accountability

AUSTIN, Texas, Sept. 29, 2026 /PRNewswire/ -- Texans for Affordable Transmission, a project of Conservative Texans for Energy Innovation, today released a study by Aurora Energy Research on competitive transmission procurement. It finds that applying competitive bidding to ERCOT's upcoming high-voltage transmission projects could lower upfront construction costs by an estimated $3 billion to $9 billion. Over the life of the projects, ratepayers could save $7 billion to $22 billion in total, or about $206 to $660 per household.

The study comes as Texas begins its largest transmission expansion in more than a decade. ERCOT's 2024 and 2025 Regional Transmission Plans outline about $36 billion in estimated costs for the Strategic Transmission Expansion Plan (STEP), which includes a new 765-kilovolt backbone. Transmission charges already make up as much as 15% of a typical residential bill in ERCOT, and they have risen about 34% in the past two years. Under current Texas law, new transmission is generally assigned to incumbent utilities through a right-of-first-refusal framework, so these projects would be built without competitive bidding.

"Texas is about to spend tens of billions of dollars on new transmission, and ratepayers will carry that cost for decades. This study shows that when developers compete and are held to binding cost commitments, projects come in on time and on budget. Texans deserve that same benefit", said Barry Smitherman, Chairman of Texans for Affordable Transmission.

What the study found

Aurora compared 47 completed transmission projects across six U.S. markets: SPP, MISO, CAISO, PJM, NYISO, and ERCOT's own Competitive Renewable Energy Zones (CREZ) program. Twenty were competitively procured and 27 were not. Projects were chosen to be comparable in length, terrain, and voltage class.

Schedule. On average, competitive projects finished ahead of their promised in-service dates in five of six markets. Three-quarters of competitive projects had no material delay, compared with just over a third of non-competitive projects. When competitive projects did slip, the causes were external and documented, such as permitting, cost-allocation disputes, and COVID. Nearly one in five non-competitive projects reported no cause for delay at all in public filings.

Cost. In SPP and MISO, completed competitive projects came in about 25% below the grid operator's initial cost estimates on average. That benchmark is the basis for the study's Texas savings projections.

Texas precedent. ERCOT's CREZ program, which built about 3,600 miles of lines to deliver West Texas wind power, allowed new-entrant developers to compete alongside incumbents. The new entrants' projects cost about $150,000 less per mile on average. Their final costs came in 9% below developer estimates, while incumbent projects ran 7% over. Lone Star Transmission's 330-mile line, the first CREZ project completed, finished ahead of schedule and 7% under its developer estimate.

Safeguards determine results.  The study stresses that competition alone does not guarantee savings. The strongest outcomes came from three features working together:

1. A "procurement" model, where the grid operator defines the project and developers compete to build it.
2. Hard cost caps backed by financial penalties, such as reductions to allowed return on equity for delays.
3. Public disclosure of developer commitments.

The report shows how much cap design matters by comparing two projects from the same developer. In SPP, the Crossroads-Hobbs-Roadrunner line came in exactly at its $291 million hard cap, which allowed no exceptions. In New York, the Empire State Line's exceptions to its $110 million cap allowed costs passed to consumers to reach $249 million.

Which Texas projects could be bid

The study identifies four STEP components as candidates for competitive procurement because they are high-voltage greenfield lines with broad regional benefits:

• Eastern Backbone: about $20.5 billion. No developers selected and no certificates filed.
• Central Texas Euclid-Hillje line: about $1.4 billion. No developers selected and no certificates filed.
• Western Loop: about $0.7 billion. No developers selected and no certificates filed.
• Permian Basin Reliability Import Paths: about $13.8 billion. Certificates have been filed by incumbent utilities. The study estimates that reopening the Permian 765-kV lines to competition could add nearly $3 billion in upfront savings.

The low end of the savings range ($3 billion upfront, $7 billion lifetime) covers only the 765-kV lines outside the Permian plan. The high end ($9 billion upfront, $22 billion lifetime) assumes the complete STEP program is competitively procured.

The full report can be found at https://tx4transmission.com/research/

SOURCE Texans for Affordable Transmission