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Texas regulators have approved the first routes in the state’s $14 billion Permian Basin power grid expansion. The decision supports rising electricity demand in West Texas and benefits several Houston-based energy companies.
The Public Utility Commission of Texas unanimously approved the routes on Aug. 28. The decision allows Oncor Electric Delivery to begin securing easements, surveying property and preparing for construction.
Permian Basin Power Grid Expansion Moves Forward
The two approved corridors will add about 424 miles of 765-kilovolt transmission lines across 32 Texas counties. This extra-high-voltage technology can transport more electricity than the 345-kilovolt lines commonly used across the state.
One route will run about 242 miles from near Glen Rose to Howard County. The second will continue roughly 182 miles west toward the Culberson and Reeves county line.
Together, the two projects could cost approximately $3.9 billion. They represent an early phase of the broader Permian Basin Reliability Plan, estimated at nearly $14 billion.
Oncor expects its first 765-kilovolt line to begin operating by the end of 2028. The company has targeted 2030 for completing its projects under the larger reliability plan.
Houston Energy Companies Gain More Grid Capacity
The approval is significant for Houston-area oil and gas producers with major Permian Basin operations. Chevron, ConocoPhillips and ExxonMobil have supported efforts to expand the region’s electrical infrastructure.
A 2022 industry study found that Permian oil and gas operations could require more than 17 gigawatts of electricity by 2032. At the time, the regional grid provided about 4.2 gigawatts.
Limited access to the grid has forced some operators to rely on diesel generators and other on-site power sources. Additional transmission capacity could support electric drilling equipment, compressors and other field operations.
The expansion could also help companies reduce fuel costs and replace some diesel-powered equipment. However, the benefits will depend on construction schedules and future connections within the basin.
Electricity Demand Is Expected to Quadruple
The Electric Reliability Council of Texas expects Permian Basin peak demand to reach 26.4 gigawatts by 2038. That would be about four times the region’s earlier peak demand.
Oil and gas electrification remains a major driver. However, data centers, cryptocurrency mining facilities, hydrogen projects and manufacturing operations are also increasing electricity needs.
The new lines will move power from other parts of Texas into West Texas. Regulators selected 765-kilovolt infrastructure because it can carry large amounts of electricity over long distances.
The technology is new to Texas. However, more than 2,400 miles of similar lines already operate across the United States and Canada, according to Oncor.
Costs and Landowner Concerns Remain
The projects have faced opposition from ranchers, landowners and local officials along the proposed routes. Critics raised concerns about property rights, environmental effects and the size of the transmission corridors.
Some state lawmakers also urged regulators to delay approval while the Legislature considered changes to the routing process. The commission moved forward but required Oncor to consult with affected property owners.
Texas electricity customers are expected to fund much of the transmission investment through charges collected over time. The final effect on monthly bills will depend on financing, construction costs and regulatory decisions.
The approval marks a major step for the Permian Basin power grid expansion and Houston’s energy sector. Texas communities, businesses and consumers will continue watching its costs, construction timeline and effect on grid reliability.