A coalition of five Texas oil and gas industry associations issued a joint memorandum on June 10, 2026, to state leadership defending the necessity of a massive extra-high-voltage power grid expansion in West Texas, calling recent criticism of the project misleading.
The joint response—signed by the Texas Oil & Gas Association, the Permian Basin Petroleum Association, the Texas Alliance of Energy Producers, the Texas Independent Producers & Royalty Owners Association, the Texas Pipeline Association—directly challenges a newly released economic assessment published by the Texas Public Policy Foundation (TPPF). The TPPF report calls for a suspension of the state’s multi-billion-dollar 765-kilovolt (kV) transmission line rollout.
The policy fight lands on the desks of Governor Greg Abbott, Lieutenant Governor Dan Patrick, and House Speaker Dustin Burrows just as administrative law judges push forward with contested routing hearings for a key 199-mile segment of the grid expansion.
The joint energy memorandum asserts that the TPPF report mischaracterizes the structural electricity requirements of West Texas. The trade groups argue that robust, high-capacity transmission infrastructure is vital to support the ongoing electrification and industrial expansion of the Permian Basin.
To substantiate the demand, the coalitions point to internal operational assessments conducted by the Electric Reliability Council of Texas (ERCOT) demonstrating that load growth in Far West Texas is outpacing current transmission capacity additions. According to ERCOT data cited in the memo, under highly stressed grid conditions, transmission import limits can be exceeded. This scenario could force the grid operator to resort to rolling blackouts or pre-emptive load shedding to prevent wider, cascading failures across the region.
The associations state that member companies have faced interconnectivity delays in the Permian Basin for more than a decade due to localized grid constraints. Highlighting the industry’s growth, the memo states that oil production in the Permian Basin surged by 430% between 2015 and 2025, while annual state and local tax revenues and royalties generated by the sector grew from $13.8 billion to $27 billion. The groups conclude that relying exclusively on localized generation models, rather than expanding long-distance transmission loops, ignores current operational realities.
The TPPF economic assessment, authored by Brent Bennett and Charles Priacci, characterizes the overarching Strategic Transmission Expansion Plan (STEP) as a regulatory overreach that places an unfair financial burden on Texas consumers.
The TPPF analysis calculates that while the direct capital costs of the approved 765-kV lines stand at an estimated $17.2 billion, the addition of localized upgrades and accompanying regional transmission lines elevates the total initial capital requirement to $33 billion. When accounting for long-term financing, equity returns, utility maintenance, and tax obligations over the life of the assets, TPPF estimates the total lifetime cost passed down to Texas utility ratepayers will approach $100 billion.
The think tank’s report also disputes the underlying driver of the massive expansion. Rather than solving a localized capacity shortage, the TPPF study argues that the 765-kV grid plan is structurally designed to integrate volatile wind and solar generation farms scattered across West and South Texas into the broader ERCOT network. TPPF asserts that the infrastructure buildout helps large industrial entities leverage federal renewable tax credits and satisfy corporate emissions targets, without fundamentally increasing the state’s pool of reliable, dispatchable thermal generation.
An independent modeling analysis by Energy Ventures Analysis included in the TPPF report claims that building the lines will not materially change ERCOT’s long-term generation mix or lower wholesale electricity prices. The report suggests that encouraging the development of localized, gas-fired generation plants within the Permian Basin would offer a more cost-effective reliability solution.
The public dispute exposes an underlying policy division over how to secure grid stability. The oil and gas associations state in their memorandum that they do not view the choice between building transmission lines and constructing new generation plants as mutually exclusive, writing that both options are necessary to meet surging industrial demand.
However, the energy groups maintain that building local power plants cannot substitute for a robust transmission network. The memo highlights that four state-incentivized Texas Energy Fund generators, representing roughly 2.4 gigawatts of dispatchable capacity, are already planned for the Far West zone. Even with those projects active, the trade associations argue that a lack of transmission infrastructure will continue to stifle new facility connections, increase the risk of localized blackouts, and impose long-term congestion costs on commercial operations.
TPPF and aligned critics counter that the current approval process lacks adequate legislative oversight. The foundation’s report stresses that House Bill 5066, passed in 2023 to address Permian Basin reliability, has been leveraged by ERCOT and the Public Utility Commission (PUCT) to implement a sweeping, statewide grid transformation that was never explicitly voted on or approved by the Texas Legislature.
The high-stakes policy debate unfolds as the State Office of Administrative Hearings (SOAH) conducts active merits hearings for the Bell County East to Big Hill transmission segment. While rural landowners have petitioned the PUCT to review routing modifications and implement a procedural pause, utility providers Oncor and the LCRA are proceeding under a rigid 180-day statutory clock that mandates a final commission decision by September 22.
The full PUCT commission is scheduled to meet for an open voting session on June 18, where commissioners will directly evaluate landowner routing appeals and face growing pressure from both sides of the multi-billion-dollar infrastructure debate.