In a move that’s sparking debate across the Lone Star State, Oncor—the largest energy delivery company in Texas—is aggressively advocating for a massive $33 billion transmission infrastructure overhaul known as the Texas 765-kV Strategic Transmission Expansion Plan (STEP). This ambitious project, which includes building high-voltage 765-kilovolt (kV) transmission lines across the state, promises to enhance grid reliability but comes with a hefty price tag that’s likely to be shouldered by everyday Texans. Owned by California-based Sempra Energy, Oncor stands to reap significant profits from the expansion, raising questions about whether this is truly about grid stability or corporate bottom lines.
Oncor’s California Roots and Influence in Texas
Oncor, headquartered in Dallas, is no stranger to controversy. The company is a subsidiary of Sempra Energy, an energy infrastructure giant based in San Diego, California. Sempra acquired a majority stake in Oncor back in 2018 for about $9.45 billion, giving it control over Texas’s largest regulated transmission and distribution utility.
This out-of-state ownership has fueled skepticism among Texans, who worry that decisions are being made with California shareholders in mind rather than local ratepayers.
The push for the 765-kV STEP traces back to legislative maneuvering. In 2023, State Rep. Charlie Geren (R-Fort Worth) authored House Bill 5066, which directed the Public Utility Commission of Texas (PUCT) to have ERCOT (Electric Reliability Council of Texas) develop a reliability plan for the booming Permian Basin region. Interestingly, Sempra had hired lobbyist Raymond C. Sullivan, a contributor to Geren’s 2022 campaign, highlighting the web of influence at play.
What started as a regional Permian Basin Reliability Project ballooned into a statewide endeavor, approved by ERCOT in August 2024 without direct legislative or public approval.
Adding to the ties, tech behemoth Google—another California-based entity—has thrown its weight behind the project. Google, a major energy consumer in ERCOT with data centers in North Texas supplied by Oncor, commissioned a study supporting the 765-kV lines and lobbied the PUCT in April 2025, citing a “robust value proposition” for handling its growing power needs.
Oncor’s leadership, including COO Jim Greer and VP Geoffrey Bailey, has emphasized the need to scale up for large loads like crypto mining and data centers, areas where the company sees profit potential.
The Scope and Costs of the 765-kV Expansion
The TX 765-kV STEP involves constructing three 765-kV extra-high voltage (EHV) transmission lines into the Permian Basin, plus two more to connect western and eastern loops, extending eastward across the state.
According to ERCOT’s 2024 Regional Transmission Plan, the project requires about 434 miles of new right-of-way (ROW) and could total up to 2,468 miles when including the full Permian plan.
The PUCT greenlit the Permian Basin portion in October 2024 and the import paths in April 2025, with a new rule in October 2025 mandating third-party monitoring by Guidehouse for costs and schedules.
For consumers, the financial hit is clear: Transmission service providers like Oncor foot the initial bill but pass costs to retail providers, who then hike rates. Estimates peg the annual cost at around $200 for the average residential user in most ERCOT areas.
By 2030, incorporating 765-kV lines could add $2.2 billion to what would otherwise be a $30 billion plan, though proponents claim long-term savings of $257 million annually by 2039 through reduced congestion and enhanced efficiency.
The plan is also expected to eliminate 1,400 miles of lesser upgrades, potentially saving on congestion costs.
ERCOT’s Capacity: Overbuilt or Underutilized?
Texas’ grid is already robust, with ERCOT boasting approximately 181 gigawatts (GW) of nameplate capacity as of 2025.
However, peak demand this year has hovered around 82-84 GW, with the highest recorded at 83.9 GW on August 18 and forecasts suggesting summer peaks could reach 87.5 GW.
Winter peaks hit 80.6 GW in February, and overall demand rose 5% from January to September compared to 2024.
This discrepancy stems largely from renewables’ lower capacity factors—wind at about 35%, solar varying—meaning the full 181 GW isn’t always available.
Still, critics point out that with such installed capacity far exceeding peak usage, the rush to spend $33 billion on transmission might be premature, especially when costs get passed to consumers already facing rising bills.
Is the Expansion Truly Needed, or Is There a Better Path?
Proponents argue the 765-kV lines are essential for grid stability amid surging demand from Permian oil and gas electrification, data centers, and crypto operations.
ERCOT studies highlight benefits like improved system strength to handle inverter-based resources (wind and solar), mitigating instability risks, and providing more siting flexibility for new generation.
A Siemens PTI analysis suggests the system could pay for itself by 2034, bringing greater value overall.
Yet, detractors, including some experts and lawmakers like Geren himself in a September 2024 letter, decry the lack of stakeholder input and warn of unnecessary burdens.
Oncor rejected a phased approach, insisting delays would exacerbate constraints.
Alternatives could include optimizing existing infrastructure, prioritizing distributed energy resources, or focusing on demand-side management like efficiency programs to curb peak growth. ERCOT is evaluating planning changes to address evolving challenges, but with demand rising, a balanced approach—perhaps blending targeted upgrades with renewables integration—might maintain stability without the full $33 billion outlay.
As Texas grapples with this expansion, the question remains: Will it fortify the grid for the future, or simply line the pockets of out-of-state owners at Texans’ expense? With costs mounting and public scrutiny intensifying, ERCOT and policymakers must weigh profits against people in charting the state’s energy path. We are looking at different interviews and Podcasts
Source: texasscorecard.com, ERCOT.com, and EnergyNewsBeat.co
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