Transmission congestion added $12 billion to wholesale power costs in 2024, according to a draft report on U.S. transmission needs the U.S. Department of Energy released July 9, 2026. The report finds that interregional transmission lines and connections between grid operators offer the highest potential for easing congestion and improving resource adequacy across the nation's electricity system. The triennial National Transmission Needs Study is designed to support regional and interregional transmission planning as demand for electricity continues to climb.
Total U.S. congestion costs rose from $11 billion in 2023 to $12 billion in 2024, though both figures remain well below the $21 billion recorded in 2022, when high natural gas prices and severe weather drove up costs, the DOE said. Between 2016 and 2024, the U.S. built just 150 miles of interregional transmission annually, with incumbent utilities developing 98% of all transmission infrastructure. The Electric Reliability Council of Texas built the most transmission at 2,400 circuit miles during that period, while PJM's eastern region spent the most at $3.5 billion per year. ISO New England had the highest load-weighted cost for transmission investment at $9 per megawatt-hour.
The report identifies specific bottlenecks where new transmission capacity could deliver significant congestion cost savings. According to the analysis, locational marginal prices indicate that more transmission links between ERCOT and its neighbors, and between the Eastern and Western interconnections, could provide substantial value, citing research from Lawrence Berkeley National Laboratory. Additional transmission capacity between NorthernGrid and WestConnect in the West, and between ISO New England and the New York Independent System Operator in the Northeast, would also produce major cost reductions. New analysis shows the Southeast would benefit from increased transmission capacity with its neighbors by about $10 per megawatt-hour on average, with the highest potential value in interregional links between Southern Co. and Florida, Duke Energy and PJM, and the Tennessee Valley Authority and MISO's southern region.
The DOE expects congestion costs will continue to increase as electricity demand grows and weather patterns become more severe. The Southeast stands out as the only U.S. region that has failed to address at least one of the four key transmission needs the report assessed: improved reliability and resilience, reduced grid congestion within regions, improved transfer capacity limits between neighbors, and resource adequacy through interregional transfer capacity. That gap matters because the Southeast lacks an organized wholesale power market or publicly available locational marginal pricing data, making it harder to identify where grid upgrades would deliver the most value. The report is open for public comment until September 7, giving stakeholders three months to weigh in before the DOE finalizes its assessment of where the nation's grid needs the most help.