Competitive Bidding on ERCOT’s 765-kV Plan Could Cut Texas Transmission Costs 7 to 22 Billion Dollars

Competitive bidding on ERCOT’s largest new transmission lines could cut upfront construction costs by $3 billion to $9 billion. That finding comes from a study Aurora Energy Research prepared for Texans for Affordable Transmission, a project of Conservative Texans for Energy Innovation. The group released the study on September 29, 2026. ERCOT’s 2024 and 2025 Regional Transmission Plans carry about $36 billion in estimated costs for the Strategic Transmission Expansion Plan, or STEP, which adds a new 765-kilovolt backbone across Texas.

The Data

Aurora compared 47 completed transmission projects across six U.S. markets. The set covered SPP, MISO, CAISO, PJM, NYISO and ERCOT’s own Competitive Renewable Energy Zones program. Twenty of those projects went through competitive procurement. The other 27 did not. Aurora picked projects that matched on length, terrain and voltage class.

Over the full life of the projects, the study puts ratepayer savings at $7 billion to $22 billion. That works out to roughly $206 to $660 per household. Barry Smitherman, chairman of Texans for Affordable Transmission, tied the result to how the contracts are written. “This study shows that when developers compete and are held to binding cost commitments, projects come in on time and on budget,” he said.

What It Means

ERCOT does not bid out its large transmission builds. The 765-kilovolt STEP Eastern Backbone, a $9.384 billion tranche of the wider plan, went to AEP Texas, CPS Energy, Oncor and CNP Texas. ERCOT staff recommended that package and the board endorsed it at its December 8 and 9, 2025 meeting, after Regional Planning Group review and Technical Advisory Committee endorsement. No competitive solicitation sat anywhere in that path. Competitive procurement would instead hold a winning developer to a binding cost commitment, which is the mechanism the study credits for the savings.

The savings range is wide because the underlying cost overruns vary. A $3 billion result and a $9 billion result point to very different assumptions about how far incumbent costs drift above estimate. Readers should treat the low end as the defensible number until the project-level data is public.

The Gap

The study does not name a specific bill, rule change or bidding threshold for Texas to adopt. It establishes a cost gap without specifying who would write the rule, the Texas Legislature or the Public Utility Commission of Texas. The sponsor is also an advocacy group that argues for competitive transmission, so the framing favors that outcome. Aurora’s underlying project-by-project cost data is not published alongside the summary, which leaves the 47-project sample impossible to audit from outside.

Why It Matters

STEP is the largest transmission expansion Texas has started in more than a decade, and ratepayers carry the cost for decades through transmission charges. ERCOT built the plan against a 2030 forecast where summer peak demand passes 150 GW, roughly 50 GW of it large load. That large-load share is what makes this a data center story and not only a residential bill story. The same transmission charge rides on every kilowatt-hour those sites take.

Critical Perspective

The study measures a cost gap, but not a Texas cost gap. Aurora drew its 47 projects from SPP, MISO, CAISO, PJM, NYISO and ERCOT’s CREZ program, and only 20 of them went through competitive procurement. Applying that spread to STEP assumes the 765 kV backbone behaves like the sample. CREZ is the only Texas entry in the set, and ERCOT runs its own siting and cost-recovery rules.

Timing is the harder question the study leaves open. ERCOT picked the 765 kV plan to meet a reliability need by 2030. A competitive solicitation adds a bidding and evaluation cycle before construction starts. The study prices what competition saves. It does not price what a later energization would cost if that 2030 date slips, and the sponsor has no reason to raise it.

Sources

• Renewable Energy World: Competitive transmission in Texas could save ratepayers billions
• Texans for Affordable Transmission: New Study Finds Competitive Bidding Could Save Ratepayers Up to $22 Billion
• ERCOT: 765-kV STEP Eastern Backbone Project recommendation
• Aurora Energy Research study (full report)

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