DOE Drafts National Transmission Needs Study as Electricity Demand Rises

The Energy Department has released a draft national study identifying a pressing need for more electric transmission capacity as data centers, domestic manufacturing, large industrial loads and electrification increase demand for power.

DOE released the draft 2026 National Transmission Needs Study on July 9, 2026, under the Federal Power Act. The agency is accepting public comments through September 7, 2026.

The study is not a national construction plan. It does not approve specific transmission lines, select projects or replace regional transmission-planning processes. Instead, it identifies current and anticipated national needs that could guide later investment and planning decisions.

What DOE found

The draft examines transmission needs linked to data centers, expanding domestic manufacturing, other large industrial users, electrification, new generation interconnections, new load interconnections and congestion relief.

DOE says most transmission congestion is concentrated in about 5% of hours, particularly during periods involving high net load, cold weather, significant intermittent generation or large differences between day-ahead and real-time market prices. The agency also identifies potential value from both additional within-region transmission and stronger interregional connections.

Those findings come as utilities and regulators consider how quickly electricity demand may grow and where new generation and large customers will connect. A July 17 report by Utility Dive, citing a Bank of America analyst forecast, said projected data-center growth could outpace planned utility capacity additions through 2030. That forecast is an independent market analysis, not a federal projection.

The study does not decide who pays

A central unresolved question is how to allocate the cost of grid upgrades. A transmission project may provide broader regional benefits, while a large new customer may require network improvements that would not otherwise be needed.

Policymakers and regulators are weighing whether those costs should fall primarily on the customer creating the need, be shared among a wider group of ratepayers or be assigned through another formula. The DOE study itself does not set household electricity rates or determine which customers will pay for future upgrades.

Those decisions generally emerge through regional planning processes, utility proceedings, federal and state regulatory actions, permitting decisions and rate cases. As a result, the study could influence later policy without directly changing a household’s bill.

FERC is examining large-load interconnections

The Federal Energy Regulatory Commission is separately examining how large electricity users connect to the interstate transmission system in docket RM26-4. FERC generally defines the large-load category in this proceeding as demand above 20 megawatts, including data centers and manufacturing facilities.

The docket is an advance notice of proposed rulemaking, an early-stage process in which FERC gathers input before deciding whether to propose specific regulatory changes. The commission is considering issues such as interconnection-study timelines, flexible or curtailable loads, reliability standards and whether large customers should pay the full cost of grid upgrades associated with their connections.

FERC also acted on June 18, 2026, when it directed six regional grid operators to justify or revise tariffs covering large-load interconnection. The orders address transmission-study processes, cost transparency, prevention of cost shifting, co-location and behind-the-meter generation, flexible large-load services and reliability reviews. The regional operators were given 60 days to defend or revise their tariffs and 30 days to submit reports on how they would ensure adequate generation for existing and new large loads.

What happens next

DOE is seeking comments from states, Tribal Nations, local communities, industry, regional reliability entities and the general public until September 7, 2026. The agency said it will review the submissions and incorporate them into the final study as appropriate.

For households and communities, the main issues to watch are whether the final study identifies different national needs, how regional planners respond to new demand, how quickly transmission projects move through permitting and whether regulators require large electricity users to bear the costs of upgrades they cause.

The draft begins a policy process; it does not authorize construction, set rates or resolve the cost-allocation debate. The consequential decisions will come through final agency actions, regional transmission plans, FERC tariff filings, permitting proceedings and utility rate cases.

Sources

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