The Department of Energy (DOE) recently announced it will not proceed with designating three proposed National Interest Electric Transmission Corridors (NIETCs) selected during the Biden administration. Secretary Wright attributed the decision to community pushback, insufficient support from the 2023 National Transmission Needs Study, and a “climate-alarmist agenda that drives up costs.” DOE posited that the decision aligns with Executive Order 14262, which directs the agency to strengthen grid reliability and security to meet electricity demand from AI data centers and domestic manufacturing—part of a broader commitment DOE commitment to deliver “affordable, reliable, and secure” energy.
But the transmission projects the NIETCs would have delivered are essential to the administration’s interests in the multi-state capacity that data center and industrial growth require. Meeting the national security, grid reliability, and energy dominance goals set out by the administration requires durable tools for building interregional transmission.
Why is transmission so important?
To fully grasp the value of the NIETCs, it is important to understand the critical role that transmission infrastructure plays in our energy system. Transmission lines are the high-voltage infrastructure that carry electricity from generation facilities (power plants, solar farms) to the substations and distribution networks that ultimately deliver it to homes and businesses. These lines have limited carrying capacity; when that capacity is reached, new facilities cannot connect to the grid.
The U.S. electric grid is divided into ten regional electrical power markets. Most transmission lines exist within a single power market, and supply and demand are managed regionally. This dynamic often results in local reliability issues or price swings, caused by weather events and other disruptions that lead demand to spike or generation to fall. The regional grids can also isolate rural areas, which are rich in wind and solar resources, from major industrial or urban demand centers.
Transmission between regions, or interregional transmission lines, connect separate grid regions, allowing electricity supply and demand to balance over a greater footprint, improving reliability, and reducing power costs. These lines are some of the most complicated to permit, build, and pay for, as they cross through multiple states, regions, and municipalities and engage a broad array of stakeholders. But they are vital to the power system. DOE found in its 2026 Transmission Needs Study that interregional transmission shows the highest potential to relieve transmission congestion and lower costs. Other studies have likewise found that interregional transmission offers some of the highest benefit-cost ratios for consumers, delivering an estimated $5 in benefits for every dollar invested.
What are NIETCs?
A NIETC is a geographic region where DOE finds that insufficient electricity transmission causes congestion issues that negatively affect consumers and grid reliability. Potential corridors go through a deliberative four-phase designation process that includes lengthy community engagement to receive a NIETC designation. Once designated, projects in the NIETC region qualify for public-private partnerships, direct loans, and backstop permitting authority at the Federal Energy Regulatory Commission (FERC).
In December 2024, DOE selected three corridors to advance to the final stage of the NIETC designation process: the Erie-Canada Connector, which would include parts of Lake Erie and Pennsylvania and connect Canada and PJM; the Southwestern Grid Connector Corridor, which would include parts of Colorado, New Mexico, and western Oklahoma; and the Tribal Energy Access Corridor, which would include parts of North Dakota, South Dakota, Nebraska, and five Tribal Reservations. These regions hold significant strategic value for the U.S., namely due to their high concentration of existing and planned data centers.
How would the NIETCs support the administration’s goals?
The Trump administration aims to revitalize American manufacturing, win the AI race, and provide affordable and reliable energy to industry and American families. Without a rapid buildout of transmission infrastructure, especially interregional lines with their unique capability to improve reliability, connect resources, and contain costs, the power grid will be an obstacle to the administration’s priorities.
Two of the biggest obstacles facing data center expansion are electricity access and an emerging movement to ban data centers over concerns related to electricity prices. Interregional lines address both issues by increasing access to cheap electricity, allowing more generation to come online and lowering prices—the main drivers behind community opposition. NIETCs would accelerate the buildout of infrastructure in locations where transmission is strained, costs are rising, and data centers are prevalent.
The Erie-Canada Connector would bring cheap, Canadian hydropower to PJM, home to the world’s largest concentration of data centers. Increased demand, coupled with insufficient generation and transmission capacity, drove up PJM’s capacity price by over 800% between 2024 and 2025, sparking widespread community pushback against data centers. Increased transmission infrastructure in the region would help lower electricity rates, supporting both data centers and ratepayers.
The Southwestern Grid Connector Corridor would bring cheaper energy from the middle of the country to Colorado. Xcel Energy, Colorado’s largest electricity provider, expects to spend about $22 billion over the next 15 years to meet data centers’ projected power demand in the state. Anticipating electricity price hikes from the planned development, several Colorado cities and counties have placed moratoria on new data center development.
The Tribal Energy Access Corridor would increase transmission into and lower rates in the Midcontinent Independent System Operator (MISO). MISO witnessed the most rapid data center development in the country from 2020-2025, but like PJM, it is struggling with rising electricity rates associated with its buildout. While the Midwest is an ideal place to site new data centers due to historically cheap energy and a climate that is conducive to data center operations (cooler temperatures lower operational energy needs and related costs), connecting new facilities to cheap power requires a rapid buildout of transmission lines.
How else can DOE support transmission buildout?
DOE has other tools to promote transmission infrastructure. In 2025 and 2026, DOE closed two loan guarantees worth nearly $5 billion to AEP Transmission and AEP Texas to replace and rebuild nearly 8,000 miles of transmission lines. And in early 2026, they closed $26.5 billion in loans to Southern Company subsidiaries to support generation, new transmission lines, and grid enhancement projects. These are substantial, important, and targeted investments to improve existing infrastructure and build new lines within a single utility’s existing footprint—essential elements in a strategy to unlock hundreds of GW of existing and underutilized capacity.
These investments are complementary to (but cannot replace) the value that interregional transmission investments could deliver. The NIETCs were uniquely well suited to bolster reliability, lower costs, and accommodate load growth across the country.
Policymakers committed to affordable, reliable, and secure power need to deliver solutions that accelerate interregional transmission connections. DOE’s existing programs can help fund upgrades and regional builds, but none of them include a mechanism to unlock new, multi-state interregional lines the way NIETC designation did, particularly its FERC backstop siting authority. With NIETCs off the table, that gap remains open—and closing it will be essential if DOE wants to deliver on the grid reliability and industrial competitiveness goals it has set for itself.