The Connect the Grid Act amends the Federal Power Act to remove specific statutory exemptions that have insulated the Electric Reliability Council of Texas (ERCOT) from certain FERC authorities and to subject ERCOT-related entities to federal jurisdiction where previously exempt. It directs FERC to order a new reliability standard that mandates minimum total transfer capability between ERCOT and its neighboring regions (SPP, MISO, and the Western Interconnection), requires joint siting and construction plans to meet those minimums, and sets a hard completion date for new or modified transmission facilities.
Beyond jurisdiction and standards, the bill accelerates financing and federal involvement: it raises the Transmission Facilitation Program’s borrowing cap from $2.5 billion to $13.5 billion, requires a DOE study on interconnection benefits with Mexico, mandates a technical conference to aid compliance, and imposes procedural and substantive priorities for siting (grid-enhancing tech, reuse of rights-of-way, degraded lands, community engagement, registered apprenticeships, and prevailing wages). These changes would alter permitting, project economics, and the balance between state control and federal planning for large transmission projects affecting Texas and its neighbors.
At a Glance
What It Does
The bill amends multiple sections of the Federal Power Act to eliminate special exemptions for ERCOT, directs FERC to adopt a reliability standard requiring minimum transfer capacity between ERCOT and adjacent regions, and compels ERCOT and neighboring entities to submit joint plans to achieve those transfer targets by January 1, 2037. It also increases available federal financing for transmission projects and requires a DOE study on interconnection with Mexico.
Who It Affects
Directly affects ERCOT, the Southwest Power Pool (SPP), Midcontinent ISO (MISO), neighboring Western balancing authorities, FERC, DOE, transmission developers, incumbent utilities, and labor organizations involved in transmission construction and apprenticeships. Environmental review and wildlife regulators (NEPA/ESA) will also be engaged for covered projects.
Why It Matters
The bill removes longstanding statutory barriers that have kept Texas largely electrically isolated and creates enforceable federal targets and timelines for cross-border transmission capacity — a structural shift in how large, multi-region transmission projects will be planned, sited, financed, and permitted in and around Texas.
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What This Bill Actually Does
At its core the bill changes who has authority over parts of the Texas grid and tells regional operators to physically connect ERCOT to its neighbors. It does that by amending the Federal Power Act to delete statutory language that carved ERCOT out of several FERC authorities and by repealing specific subsections that previously insulated ERCOT-related entities from coverage.
The net effect is to fold ERCOT-related facilities and entities more squarely under federal oversight where they had previously been treated as ‘‘otherwise exempt.’”
Once jurisdictional changes are in place, the bill uses the reliability standard process (section 215) to force concrete engineering outcomes. FERC must order the Electric Reliability Organization to propose a standard with explicit minimum total transfer capability ranges: (a) a specified band between ERCOT and SPP, (b) a band for ERCOT–MISO, and (c) a band for ERCOT–Western Interconnection.
The Commission can only approve the standard if it also requires ERCOT and each neighbor to jointly identify who will site and construct or modify the transmission facilities, submit a timeline within one year, and complete work by January 1, 2037.The legislation layers implementation requirements on top of the engineering targets. Plans must prioritize grid-enhancing technologies, reuse of existing rights-of-way (highways, rail), siting on degraded or formerly contaminated land, expanded access to renewables, robust outreach to environmental justice and Tribal communities, and use of registered apprenticeship programs with prevailing wages.
It also makes clear covered projects will be subject to NEPA and the Endangered Species Act and authorizes the Secretary of Energy to consider new national interest transmission corridors for areas where the required projects will be sited.Finally, the bill increases federal financing capacity through the Transmission Facilitation Program (raising the cap to $13.5 billion) and asks DOE to study cross-border interconnection benefits with Mexico within a year. There’s a near-term technical conference requirement from FERC to publish compliance steps within six months, intended to help affected entities adapt to the new obligations and timelines.
The Five Things You Need to Know
The bill removes specific FERC exemptions for ERCOT by amending sections of the Federal Power Act and striking statutory carve-outs that previously limited federal jurisdiction over ERCOT-related entities.
FERC must order a reliability standard requiring minimum total transfer capability between ERCOT and SPP (4.3–12.6 GW band), ERCOT and MISO (2.5–16.2 GW band), and ERCOT and the Western Interconnection (2.6–7.9 GW band).
ERCOT and each relevant neighbor must, within one year of the standard, jointly nominate entities to site and build or modify transmission capacity and complete construction by January 1, 2037.
The bill raises the Transmission Facilitation Program borrowing cap from $2.5 billion to $13.5 billion to support siting and construction of required transmission projects.
Covered projects intended to meet the transfer-capability standard are explicitly subject to NEPA and the Endangered Species Act, and the Secretary of Energy may consider designating national interest electric transmission corridors for those projects.
Section-by-Section Breakdown
Every bill we cover gets an analysis of its key sections.
Remove ERCOT’s statutory exemptions and broaden federal jurisdiction
This section amends 16 U.S.C. 824(b)(2) and 824(e) to replace language that had identified ERCOT-related entities as effectively exempt, and it strikes specific subsections in the Federal Power Act (sections 212(k), 216(k), 217(h), and 220(f) as reflected in the bill) that previously limited federal reach. Practically, utilities, transmission owners, and other entities operating in ERCOT will be more likely to fall within FERC’s statutory authorities where actions intersect interstate transmission or reliability obligations. The section also mandates a technical conference within six months to publish compliance steps, a concrete implementation touchpoint for regulators and industry.
Narrow and reassign certain Electric Reliability Organization authorities
The bill amends section 215 of the Federal Power Act by changing text in subsection (a)(3) and subsection (i)(2). Those edits alter the statutory language about what the Electric Reliability Organization can require — removing some phrasing about enlarging facilities and transmission construction while preserving authority around generation. The drafting raises immediate questions about the interplay between the new mandatory transfer-capacity standard and any limits the same amendments impose on reliability organizations’ authority to direct transmission construction, which will be an early point of regulatory interpretation.
Mandate minimum total transfer capability and joint planning requirements
FERC must order the Electric Reliability Organization to propose a reliability standard with explicit minimum transfer bands for ERCOT–SPP, ERCOT–MISO, and ERCOT–Western Interconnection. Approval is conditioned on a requirement that the relevant regions jointly submit within one year a plan naming entities responsible for siting and construction or modification and that the work be completed by January 1, 2037. The one-year plan window plus a hard 2037 deadline establishes compressed project schedules for multi-state, multi-operator transmission builds.
Siting priorities, community engagement, wages, and environmental review
The bill lists concrete siting and construction priorities: favor grid-enhancing technologies, reuse of existing rights-of-way, siting on degraded or brownfield lands, and projects that enhance renewable access. It also requires meaningful outreach to environmental justice communities, Tribal governments, Tribal and Indigenous communities, and labor organizations, and it conditions construction on registered apprenticeships and prevailing-wage rules. Critically, projects intended to meet the standard are subject to NEPA and the Endangered Species Act, embedding federal environmental reviews into the schedule.
Increase Transmission Facilitation Program borrowing authority
Section 40106(d)(2) of the Infrastructure Investment and Jobs Act is amended to raise the Transmission Facilitation Program borrowing cap from $2.5 billion to $13.5 billion. That increase is substantial relative to the prior cap and signals federal willingness to backstop financing for large interregional transmission projects, though the bill does not itself specify loan terms or allocation rules for that expanded pool.
DOE Mexico interconnection study and new definitions
The bill directs DOE to study the reliability, climate, and cost benefits of interconnection with Mexico and to report within one year, which creates a formal federal inquiry into binational grid planning. It also codifies terms used throughout the Act — from ‘‘grid-enhancing technology’’ to ‘‘environmental justice community’’ and ‘‘total transfer capability’’ — to reduce ambiguity in implementation and to guide outreach and siting priorities.
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Explore Energy in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Interregional renewable developers — Gain access to larger markets and new load centers if interties increase transfer capability and open ERCOT to outside procurement, improving project economics for wind, solar, and storage sited to serve multiple regions.
- Grid operators and reliability planners — Receive enforceable targets and federal backing to close historically thin interconnections, reducing single-region vulnerability and enabling more coordinated outage and resource sharing.
- Unionized construction and apprentices — The bill’s emphasis on registered apprenticeship programs and prevailing wages directs a meaningful share of construction work into unionized, higher-wage labor pipelines, supporting workforce development tied to transmission builds.
- Communities subject to grid vulnerability — Regions that have experienced reliability failures could gain resilience from increased transfer capability and diversified supply options, potentially lowering blackout risk and improving regional adequacy.
- Transmission builders and financiers targeting large projects — The expanded Transmission Facilitation Program cap and federal attention increase the pool of projects suitable for large-scale, long-term financing and federal loan support.
Who Bears the Cost
- ERCOT utilities and ratepayers — Physical interties and upgrades will involve substantial capital costs that will need to be allocated among participants and ultimately recovered from customers unless covered by federal financing; the bill does not dictate allocation mechanics.
- Transmission owners and developers — Will face accelerated timelines, added environmental review burdens, apprenticeship and prevailing-wage requirements, and potentially higher upfront costs tied to cleanup or rights-of-way reuse.
- Federal agencies and regulators — FERC, DOE, and agencies responsible for NEPA/ESA reviews will absorb coordination, permitting, and litigation workloads; the statutory deadlines and complex binational study increase agency resource demands.
- Local landowners and communities along proposed routes — Even with priorities favoring degraded lands and rights-of-way reuse, some private land and local siting interests will be impacted and may face eminent-domain or corridor designation pressures.
- State regulators and legislators in Texas — Must grapple with a shift in practical control over planning and potential cost allocation decisions that could alter state-level energy policy and customer rates.
Key Issues
The Core Tension
The bill embodies a hard policy trade-off: accelerate and federalize transmission-builds to deliver near-term reliability, market integration, and climate benefits versus preserving regional control, predictable cost allocation, and robust environmental and community review. Pushing projects forward quickly helps avoid future blackouts and unlock renewables, but it raises who pays, who decides route and siting, and how thoroughly environmental and Tribal concerns are resolved — a set of conflicting priorities with no simple technical fix.
The bill stitches together aggressive federal tools — jurisdictional repeal, a mandatory reliability standard with numeric transfer bands, and expanded federal financing — but it leaves key implementation choices unresolved. It does not set cost-allocation rules for who pays for interstate upgrades, and it delegates much of the technical work to the Electric Reliability Organization and the regions themselves.
That gap means that, once the standard is in place, stakeholders will litigate or negotiate recovery mechanisms and regional cost-sharing formulas while running against the statute’s one-year planning clock and the 2037 build deadline.
There are also internal tensions between the bill’s text and practical outcomes. Amendments to section 215 change the statutory wording about the Electric Reliability Organization’s authority over ‘‘transmission’’ in ways that could be read as narrowing the organization’s power to compel new transmission — even though the bill simultaneously forces minimum transfer capabilities that will require precisely that transmission.
Implementers will need to reconcile those provisions, and courts or FERC rulemaking may be asked to harmonize conflicting directives. Finally, the mandate to prioritize degraded lands, existing rights-of-way, and environmental justice outreach confronts on-the-ground constraints: contaminated sites carry remediation liabilities, rights-of-way reuse has engineering limits, and NEPA/ESA reviews can delay projects beyond politically attractive deadlines.
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