Sen. Martin Heinrich (D-N.M.) today is introducing a bill that would give a 30% tax break to long-haul transmission lines, Latitude Media has learned.
The 10-year investment tax credit would apply to new lines and upgrades that cross interstate and regional boundaries — or are at least 100 miles long — as well as those in the U.S. Outer Continental Shelf where offshore wind is often sited. The projects would need to add 500 megawatts of capacity or more and meet certain voltage thresholds.
The bill comes as U.S. construction of high-voltage transmission lines has dropped to historic annual lows, averaging about 400 new miles in both 2023 and 2024 compared to nearly 4,000 miles in 2013, according to the Federal Energy Regulatory Commission. The slow down has led to massive bottlenecks for new energy projects, data centers, and manufacturers looking to hook up to the grid, as well as hiked congestion costs that ultimately get passed onto customers’ utility bills.
“At a time when families are already facing sky-high energy costs, we need to make sure our investments in the grid actually help bring those costs down,” Heinrich, ranking member of the Senate Energy and Natural Resources Committee, said in a statement.
Heinrich doesn’t have a Republican cosponsor on the bill, meaning it’s unlikely to go anywhere this Congress. But the timing suggests speeding up transmission build outs may be a part of Democrats’ energy and affordability platform should they take control of Congress after the midterm elections in November. In a separate conversation with Latitude Media yesterday, three House Democrats — Kathy Castor, Mike Levin, and Nikki Budzinski — also emphasized that getting more transmission built is a top priority.
Heinrich’s proposal would tackle one major obstacle to building transmission: the high upfront price tag, which often tallies billions of dollars and is exacerbated by elevated interest rates. SunZia, one of the first regional lines in a generation that spans 550 miles across the southwest, cost $6 billion and took 20 years to finish.
About a dozen groups have already endorsed Heinrich’s Grid Resiliency Tax Credit Act, notably including the Edison Electric Institute, the trade group representing utilities; historically, some vertically integrated utilities that own both fossil-fuel generation and power lines have resisted new interregional transmission lines that would carry cheaper renewable power into their territory. Other backers include the National Electrical Manufacturers Association, Natural Resources Defense Council, Americans for a Clean Energy Grid, and the International Brotherhood of Electrical Workers.
Peter Ferrel, NEMA’s senior director of government relations, said the legislation recognizes that boosting transmission capacity doesn’t always require new poles and wires.
“A lot of it can come from strategic upgrades to what’s already in the ground, like swapping in advanced conductors on existing corridors,” Ferrel said. “That’s not only faster, it’s also reliably cheaper, and it means households and businesses aren’t waiting years for entirely new infrastructure.”
Permitting remains a problem
However, transmission lines also face another hurdle that the bill leaves unaddressed: lengthy construction timelines often due to permitting fights and litigation at the federal, state, and local levels.
A bipartisan group of senators, including Heinrich, for months have been negotiating a federal permitting reform bill aimed at speeding up energy infrastructure, including transmission lines, clean energy and fossil fuel projects. A proposal could include statutory deadlines for environmental reviews and shortening windows for opponents to sue over approved permits, among other changes.
However, this group is just the latest effort; for years, their predecessors have tried and failed to pass permitting reform.
In this iteration, a deal has proven elusive as the Trump administration continues to block permits for solar and wind projects that intersect with federal land. Litigation over those policies is ongoing — though just yesterday, Politico reported that the president told aides and advisors that he would be willing to ease off of those attacks to close a permitting deal.
Meanwhile, Sen. Brian Schatz (D-Hawaii), during an event hosted by Axios at New York Climate Week on Monday, said an agreement is “very close,” with the caveat that lawmakers still need assurances that the the Interior Department and the Pentagon will resume approving those renewable energy permits. Schatz said he met with Sen. Sheldon Whitehouse (D-R.I.), ranking member of the Environment and Public Works Committee and the lead Democratic negotiator along with Heinrich.
That said, Trump’s energy advisor also told Axios on Tuesday that the White House is also pushing for a permitting deal to include provisions that shield ratepayers from the costs of serving AI data centers’ power needs, which could complicate negotiations at the eleventh hour.
