The Next Wave of Transmission Funding Is Being Shaped Now

DOE’s draft 2026 National Transmission Needs Study is not a funding announcement. It may be something more strategically important: the federal evidence base that will help determine which transmission problems, regions, technologies, and projects are positioned for the next cycle of grants, loans, corridor designations, and federal credit support.

For utilities, public agencies, Tribal governments, transmission developers, large energy users, and technology providers, the opportunity is not to wait for the next notice of funding opportunity. The opportunity is to use the study’s public comment period and the months that follow to establish need, build the right partnerships, reduce project risk, and assemble the evidence that successful federally supported projects have had in place before funding became available.

What Previous Investments Tell Us

Federal transmission support has been used successfully in three distinct ways. Understanding these stages is essential because a planning-stage project should not pursue the same funding strategy as a construction-ready transmission line or a utility seeking long-term financing.

Funding the work that makes projects buildable

Early-stage federal grants have helped states, local governments, and communities improve siting processes, evaluate corridors, and create community benefits around major transmission projects. The U.S. Department of Energy’s Office of Electricity selected 20 projects across 16 states for a combined $371 million in the first Transmission Siting and Economic Development round, including an $8 million award to the Illinois Commerce Commission to improve transmission siting and a $1.7 million award to Alamosa County, Colorado, to study potential Colorado-New Mexico corridors.

The lesson is that federal support does not begin at construction. It can begin with the institutional, environmental, community, and permitting work needed to make later investment possible. Clients with corridor studies, permitting modernization, Tribal planning, workforce development, or community infrastructure needs should treat those activities as a distinct and fundable project stage.

Using federal participation to resolve commercial risk

DOE’s Transmission Facilitation Program has used capacity contracts to act as an anchor customer for large transmission lines. Southline Phase 1 received a $477 million capacity contract, Cross-Tie received approximately $226 million, and SWIP-North received up to $331 million in federal support.

These projects were not selected based only on the general need for more transmission. They entered the process with defined routes, substantial capacity, identifiable interconnection points, regional planning support, or advanced permitting. Federal participation was used to close a specific commercial gap, not to substitute for an undeveloped project.

This distinction also explains why selection alone is not enough. Twin States Clean Energy Link was selected for federal support but was later canceled after the developer concluded that the project was not commercially viable. A federal award can strengthen a viable project, but it cannot indefinitely compensate for weak offtake, unresolved cost allocation, inadequate stakeholder support, or an incomplete commercial structure.

Financing mature infrastructure at scale

The strongest completed examples involve projects that had moved beyond concept development. The Western Area Power Administration’s Transmission Infrastructure Program financed approximately $161 million for Enbridge’s Montana-Alberta Tie Line, which was completed, placed in service, and repaid its federal loan in full. The same program financed the ED5-Palo Verde project in Arizona, which entered service in 2015 and added approximately 254 megawatts of transmission capacity.

More recently, DOE closed a $1.604 billion loan for AEP Transmission to rebuild and reconductor portions of approximately 5,000 miles of existing transmission infrastructure across five states. DOE then closed a $3.26 billion loan for AEP Texas covering approximately 100 projects and more than 2,800 miles of transmission work, much of it within existing rights-of-way and tied to rapid load growth in Texas.

These financings point toward an especially important future opportunity: upgrading existing infrastructure can be more financeable than developing an entirely new corridor. Reconductoring, grid-enhancing technologies, dynamic line ratings, substation improvements, and replacements within existing rights-of-way can add capacity faster while reducing siting and permitting risk.

The Characteristics Federal Funders Have Rewarded

Across grants, capacity contracts, development assistance, and loans, the projects that advanced furthest shared several characteristics:

•    A documented need: Successful projects connected their scope to reliability, congestion, resource adequacy, interregional transfer capability, aging infrastructure, or measurable load growth.

•    Planning validation: RTO, ISO, state, utility, or regional planning support demonstrated that the project addressed a recognized system need rather than a developer-defined opportunity.

•    Commercial support: Firm offtake, capacity commitments, utility memoranda, or a credible repayment structure helped demonstrate that the project could remain viable after federal participation.

•    Permitting maturity: Projects with defined corridors, existing rights-of-way, environmental progress, land control, or clear permitting pathways carried less execution risk.

•    Strong public-private structures: Large deployment grants commonly paired a state or Tribal applicant with utilities, developers, communities, and regional partners.

•    Meaningful leverage: Federal funds were combined with substantial recipient cost share, utility capital, or private investment. The Grid United-led North Plains Connector, supported through a Montana Department of Commerce application and a broad utility and Tribal partnership, paired a conditional $700 million GRIP selection with approximately $2.8 billion in recipient cost share and entered permitting with significant utility capacity commitments (North Dakota Public Service Commission filing).

•    Community and Tribal engagement: Successful applicants increasingly treated affected communities and Tribal governments as project partners rather than stakeholders consulted after major decisions were made.

•    A project that survives without a grant: Projects with durable commercial fundamentals are more likely to withstand changing federal priorities, delayed appropriations, or modified award terms.

These are not merely application-writing considerations. They are project-development requirements that should be addressed before the next funding notice is released.

Why the 2026 Needs Study Matters

The draft study identifies transmission needs across 20 regions and links future demand to data centers, artificial intelligence, domestic manufacturing, large industrial loads, electrification, aging infrastructure, and generation interconnection. It also emphasizes the reliability and economic value of interregional and cross-interconnection transmission.

That federal validation can become part of the foundation for future funding and financing decisions. It can help support National Interest Electric Transmission Corridor designations, Transmission Facility Financing eligibility, future DOE loan decisions, state-led solicitations, Federal Energy Regulatory Commission planning implementation, RTO and ISO planning, and the justification for subsequent congressional appropriations.

The study therefore creates a strategic window. Organizations that can connect a specific project, service territory, Tribal community, industrial development area, or technology solution to the needs identified by DOE will be better positioned than organizations that first

begin making that case after a solicitation is published.

What Clients Should Do Now

During the public comment period

Clients should use the public record to document needs that may otherwise remain invisible in national modeling. Comments should provide localized evidence, including load forecasts, congestion and curtailment impacts, reliability risks, interconnection constraints, economic development plans, Tribal energy-access needs, permitting barriers, and projects that could address those conditions.

Comments should also ask DOE to clarify:

•    How the 2026 study will influence future NIETC designations and the associated $2 billion Transmission Facility Financing program.

•    How Section 1706 financing will be applied to reconductoring, interregional transmission, and grid infrastructure serving large new loads before the program’s current September 30, 2028 commitment deadline.

•    Whether future or successor funding will be available after current Transmission Facilitation Program resources are committed.

•    How DOE will coordinate its financing tools with state solicitations, FERC Order 1920 planning, and RTO or ISO project selection.

•    Whether DOE will provide dedicated planning, data-development, and technical-assistance resources for Tribal transmission needs.

•    How projects can move from planning and permitting grants to deployment funding and ultimately federal credit support without repeatedly rebuilding the same need justification.

Over the next 90 days

Potential applicants should complete a transmission funding readiness assessment. This should identify the project’s current stage, best-fit federal instrument, regional need, eligible applicant, utility and governmental partners, cost-share strategy, commercial structure, permitting status, and evidence gaps.

Clients should also begin assembling the core project record: preliminary engineering, corridor maps, load forecasts, cost and schedule estimates, environmental and permitting plans, community and Tribal engagement documentation, letters of support, RTO or state-planning references, benefit-cost analysis, and potential offtake or repayment arrangements.

Before the next solicitation

The goal should be to enter the next funding cycle with a project that is already organized, supported, and financeable. That means securing the appropriate governmental or utility lead, documenting nonfederal leverage, resolving material siting issues, quantifying ratepayer and reliability benefits, and establishing a credible capital stack.

For many clients, the best near-term project may not be a new transmission line. It may be reconductoring an existing corridor, installing grid-enhancing technologies, modernizing substations, improving permitting systems, developing a regional transmission portfolio, or funding community infrastructure connected to a future line.

The Strategic Opportunity

The next wave of transmission funding will likely favor projects that can demonstrate three things simultaneously: a need recognized by federal and regional planners, a solution mature enough to execute, and a financial structure capable of leveraging federal participation rather than depending entirely upon it.

The 2026 Needs Study gives clients an opportunity to begin building the first part of that case now. The organizations that use this period to shape the public record, develop partnerships, and close readiness gaps will have an advantage when the next grant, financing, corridor, or state procurement opportunity emerges.

Grant Management Associates can help clients translate the study into a project-specific funding strategy. This includes assessing readiness and competitiveness, mapping the project across planning grants, deployment funding, and federal financing, developing public comments, organizing partnerships and cost share, and building the evidence package needed for a future GO or NO-GO funding decision.

Recommended Next Step

Complete a confidential Transmission Funding Readiness and Positioning Review before the next federal solicitation is announced.

@Grant Management Associates, @U.S. Department of Energy, @Office of Electricity, @Western Area Power Administration, and @Federal Energy Regulatory Commission, @American Electric Power, @Grid United, @North Plains Connector, and @Enbridge, @Midcontinent Independent System Operator, @Southwest Power Pool, @California ISO