United States Commits $1.3B for Power Lines in West and Northeast
It was announced by the Biden administration that $1.3 billion is being committed for three new power lines crossing six states in the U.S. West and Northeast. Though not to fund direct construction of the lines, the U.S. Department of Energy (DOE) will seek to reduce the financial risk of the companies building the lines via offering capacity contracts authorized by a $2.5 billion program in the 2021 bipartisan infrastructure law.
According to Reuters, under the contracts, the DOE can buy up to 50% of the capacity of transmission lines for up to 40 years and sell the contracts to recover costs.
Energy Secretary Jennifer Granholm told reporters in a call the arrangement allows the DOE to be an anchor tenant of the lines, “which gives the developers the confidence that they can actually build and that there will be offtake” of the power from the lines.
