# DOE Retreat on Transmission Corridors Tests the Case for Building Ahead — retained record

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source: [news](https://highsignal.app/data/news) (news:datacenterknowledge)  published 2026-08-28 13:12 ingested 2026-08-28 14:42

[original source ↗](https://www.datacenterknowledge.com/energy-power-supply/doe-retreat-on-transmission-corridors-tests-the-case-for-building-ahead)

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DOE Retreat on Transmission Corridors Tests the Case for Building Ahead
DOE declined three proposed transmission corridors as its own study cites data center load growth, raising questions about how far ahead utilities should build.
Data center developers can seek gigawatts of power years before a transmission line can be permitted and built. That mismatch is putting new pressure on grid planners just as the Department of Energy has decided not to designate three proposed National Interest Electric Transmission Corridors (NIETC) that had advanced to the third federal review process phase.
DOE’s decision came after its draft 2026 National Transmission Needs Study identified accelerating electricity demand, including data centers and other large loads, as a major driver of future transmission needs. DOE said the draft study found a pressing need for additional transmission because of load growth from data centers, domestic manufacturing, large industrial loads and electrification.
That leaves utilities and regulators facing a familiar problem: Build transmission early enough to support new demand, or risk making the grid the bottleneck after projects are committed.
Building too far ahead creates the opposite risk. Utilities and customers can be left paying for infrastructure built around load that never materializes.
Texas’ experience with the Competitive Renewable Energy Zones, or CREZ, provides one example of what proactive planning can accomplish.
DOE’s Transmission Policy Tension
Former DOE Secretary Jennifer Granholm has questioned the decision not to designate the three proposed corridors.
In a LinkedIn post, Granholm pointed to the timing of the decisions, noting that DOE’s own transmission study identified a “pressing need” for transmission to accommodate load growth and maintain reliability.
“You can’t declare an energy emergency, demand that America pump out more electricity, and then purposefully make it harder to deliver that power where it’s needed,” Granholm wrote.
DOE’s decision does not necessarily conflict with the broader finding that the country needs more transmission, said Neil Osnato, founder of Persistence Analytics Group.
“The Needs Study identifies a national transmission problem,” Osnato said. “The NIETC process asks a different question: whether specific geographic corridors satisfy the statutory and evidentiary basis for federal designation.”
DOE concluded there was not a sufficient basis to designate any of the three potential NIETCs that advanced to Phase 3. The corridors were the Tribal Energy Access Corridor, Southwestern Grid Connector Corridor and Lake Erie-Canada Corridor. DOE said its decision reflected the 2023 National Transmission Needs Study, public and governmental input and other information gathered during the designation process.
A NIETC is a geographic designation, not approval for a specific transmission project. It can make certain federal transmission tools available and, in limited circumstances, trigger FERC authority to issue permits for eligible transmission facilities within the corridor.
Osnato said the episode highlights a broader problem. The US has tools for identifying transmission needs, but fewer tools for turning those needs into timely, coordinated interstate projects.
But transmission planning and load development operate on very different timelines.
Texas Offers a Planning Model
As Data Center Knowledge previously reported, Texas built its CREZ transmission system to move electricity from areas of West Texas with substantial wind development to population centers. The transmission was planned ahead of the full generation buildout.
Nearly two decades later, data center developers are gravitating toward the same part of the Texas grid because of the transmission and power infrastructure CREZ helped create.
Galaxy Digital’s Helios campus in Dickens County is one example. The project is being developed as a multi-gigawatt data center platform in an area served by substantial transmission infrastructure, giving the company access to power that was not built specifically for data centers.
Texas did not wait for every wind project to be built before constructing the CREZ network. The state planned around where it expected generation to develop and built the transmission needed to connect it.
A July report from the Energy Systems Integration Group’s Large Loads Task Force, prepared by Brattle principal Johannes Pfeifenberger, Warren Lasher and ESIG’s James Okullo, points to CREZ as an example of how transmission planning can adapt to rapid and uncertain large-load growth.
The report recommends that planners move beyond project-by-project upgrades toward proactive, scenario-based and multi-value planning. It also points to development-zone approaches such as Texas CREZ and Illinois REAP as examples of how planners can prepare for uncertain future demand.
Osnato said the CREZ approach can inform data center planning, but the evidence behind the two types of development is different.
“CREZ showed the value of identifying development zones, planning transmission at scale, and avoiding a sequence of one-off upgrades that become slower and more expensive over time,” Osnato said. “That logic absolutely applies to clustered data-center growth.”
CREZ was built around geographically concentrated generation development. Data center planning often relies on future load that remains conditional on customer contracts, power delivery, financing, permitting, site readiness and technology decisions, Osnato said.
“So I would borrow the CREZ concept of proactive zones and scale planning,” he said, “but pair it with a much stronger requirement to prove which loads have actually earned the right to drive that investment.”
Build Ahead, But Not Ahead of Evidence
Transmission planning, permitting and construction can take five to 10 years or longer, while large-load projects can seek interconnection within months or a few years, according to the ESIG report.
Waiting until every customer is fully energized risks making transmission the bottleneck.
But building billions of dollars of infrastructure around every announced gigawatt creates stranded-capital and cost-allocation risks.
“In some places, yes,” Osnato said when asked whether today’s pace of data center development justifies building transmission ahead of firm commitments. “But ‘ahead of firm commitments’ should not mean ‘ahead of evidence.’”
Osnato favors a staged approach.
Planners should develop broad scenarios, preserve transmission corridors and development options early, then release increasingly irreversible capital as the underlying load passes defined evidence gates, he said.
A utility might secure rights of way or design a scalable transmission solution before every megawatt is contracted, Osnato said. That is different from committing the full capital investment as though every projected megawatt were equally durable.
He suggested separating the process into three questions: What is represented? What is independently supported today? What change would invalidate that conclusion?
“The real discipline is not choosing between ‘build early’ and ‘wait,’” Osnato said. “It is deciding which decisions are reversible, which are irreversible, and how much evidence should be required before crossing each one.”
Large Loads Test the Planning Model
Data centers are putting that planning model under pressure.
The ESIG report says large loads differ from historical demand growth because individual facilities can reach gigawatt scale, projects can cluster geographically and development can occur on much shorter timelines than major transmission projects.
The report identifies a mismatch between the time required to develop transmission and the speed at which large loads can seek interconnection.
ERCOT’s large-load pipeline shows the scale of the problem.
ERCOT was tracking about 474.7 GW of large-load interconnection requests as of June, including about 420.8 GW, or 90.2%, associated with data centers. The requests are not equivalent to committed demand, and the queue includes projects at different stages of development.
The size of the queue has prompted Texas officials to scrutinize which projects are real enough to shape grid planning. On June 10, Gov. Greg Abbott directed the PUC and ERCOT to review data center projects and address development risks and costs that could otherwise fall on Texas customers. In August, Abbott ordered a comprehensive audit of data centers advancing through ERCOT’s interconnection process.
For transmission planners, the question is how much of that pipeline should influence investment decisions today.
The ESIG report recommends moving beyond isolated, project-by-project upgrades toward proactive, scenario-based and multi-value planning.
Plan Ahead, Then Verify
Utilities may have to start planning years before a data center signs a final power contract. That puts more weight on the evidence behind load forecasts and on how much capital utilities commit at each stage.
Development zones, scenario-based planning and expandable transmission designs can give planners more options as demand takes shape. The ESIG report points to Texas CREZ as one example of planning transmission around expected development rather than waiting for every project to materialize.
Texas also provides a real-world example of how that infrastructure can matter years later. Data center developers are now locating major projects in areas where transmission built for the state’s earlier wind buildout provides access to substantial power.
For Osnato, the lesson is not to wait for every megawatt to become certain before planning. It is to distinguish between early planning decisions that preserve options and later capital commitments that are difficult to reverse.
“The real discipline is not choosing between ‘build early’ and ‘wait,’” Osnato said. “It is deciding which decisions are reversible, which are irreversible, and how much evidence should be required before crossing each one.”
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