Aurora Energy Research finds that competitive transmission procurement for 765kV lines in Texas could save ratepayers up to $660 per household. Sep 29, 2026 4 mins read Download the Report Highlights Media Contact New report finds competitive procurement applied across unallocated STEP projects could cut construction costs by up to $9 billion. Austin, TX (AURORA ENERGY RESEARCH) - A new report from Aurora Energy Research, prepared for Texans for Affordable Transmission, finds that Texas could meaningfully reduce the cost of its planned transmission buildout through competitive procurement if the right market safeguards are built in. After decades of slower demand growth, electricity load in ERCOT is accelerating rapidly, driven by a surge in data center development for AI, ongoing electrification of oil and gas operations in West Texas, and broader population and industrial growth. Transmission charges already can make up to 15% of a typical Texas power bill and have risen 34% in just two years. To meet these growing reliability needs, ERCOT is planning over $36 billion in new 765kV transmission lines through its Sustainable, Transmission, and Economic Program (STEP). Aurora's analysis of 47 competitive and non-competitive transmission projects across six U.S. markets finds that competitive projects finished on time or early in five of six markets. In the best performing markets, competitive projects came in an average of 25% below initial cost estimates. Applying those results to unallocated STEP projects could lower construction costs by up to $9 billion, translating to up to $660 in lifetime savings per household. In addition, competition also improved accountability, with problems caught and addressed sooner, and encouraged new engineering approaches and equipment that pushed down costs further. The savings, however, are not automatic. Aurora's analysis finds they only materialize when three conditions are in place: a procurement model where developers compete head-to-head on a defined project; binding cost caps with real financial penalties for missing them; and public reporting of developer cost and schedule commitments throughout the project. Markets that have combined all three have seen the strongest results. The report notes that ERCOT has precedent for this approach. The state's Competitive Renewable Energy Zones program, completed in 2014, opened transmission development beyond incumbent utilities and saw new entrant developers outperform incumbents on both cost and cost escalation, with new entrant project costs coming in 9% below their initial cost estimates on average, compared to incumbents who exceeded theirs by 7%. ERCOT has the largest large-load queue of any U.S. market, and transmission investment is accelerating sharply to keep pace. How that infrastructure gets built will shape electricity costs for Texas ratepayers for decades. The data we analyzed from projects across the US suggests there is a more cost-effective way to deliver it, and this report lays out what that would require. Olivier beaufils. Head of US Central at Aurora Energy Research Media Contact. Sarah hrovat. Press Officer, North America About AURORA ENERGY RESEARCH. Established in 2013, Aurora Energy Research is a leading global provider of power market forecasting and analytics for critical investment and financing decisions for more than 1,000 clients. Headquartered in Oxford, we operate out of 18 offices worldwide covering Europe, North & South America, Asia, and Australia. Our comprehensive services include market outlook packages for energy industry participants, advisory support, and innovative software solutions. We foster diversity with a team of over 1000 experts with backgrounds in energy, finance, and consulting, offering unparalleled expertise across power, renewables, storage, hydrogen, carbon, and fossil commodities. Our mission is to ease the global energy transition through widely trusted quantitative analysis and high-quality decision support. Shaping the energy discussion Energy Unplugged by Aurora Subscribe for direct access to Aurora's latest media releases, research highlights, and company news.

Power grid officials reverse plan to give ERCOT CEO $6.4 million compensation package, Dan Patrick says. The president and CEO of the Electric Reliability Council of Texas secured approval for a contract Tuesday that could pay up to $6.5 million next year, which would have made him one of the highest paid executives of an independent system electric grid operator in the country. But board members of the entities that respectively operate and regulate the state's main power grid reversed their decision, according to Lt. Gov. Dan Patrick. Recommended Videos Both ERCOT and the Public Utility Commission, which regulates the grid, advanced a six-year contract extension for Pablo Vegas on Tuesday during ERCOT's regular board meeting. Patrick, though, said on social media that he told the chairs of both agencies to "immediately reverse their action" and that they complied. "I am against the increase, and I think the legislature will agree that the amount is shocking," Patrick said. Patrick's post came after The Texas Tribune originally published a story about the initial contract approval. A ERCOT spokesperson could not immediately comment after Patrick's post. A PUC spokesperson had previously confirmed the initial vote to grant Vegas the new contract, but did not mention any reversed decisions. It was unclear late Tuesday how the decision was reversed. Under the contract in question, Vegas would make the salary in 2027. The potential $6.5 million includes a final $1.4 million "make-whole" payment negotiated under the terms of Vegas' first contract approved in 2022, the year he assumed the top role at the nonprofit, according to a board presentation of the terms of the contract. Vegas' 2027 pay under the proposed contract would represent a more than 80% increase in his compensation from 2024, which was $3.6 million, according to ERCOT's most recent 990 form filed in late 2025. ERCOT did not respond to requests for comment on why Vegas' salary is increasing. The previous highest earning CEO of a nonprofit grid operator was John Bear, the head of Midcontinent Independent System Operator, who earned $3.7 million in 2024, according to the organization's most recent 990 form filed in late 2025. There are seven organizations in the continental U.S. that control and monitor the operation of an electric power grid, including ERCOT. The proposed contract came as ERCOT grapples with challenges surrounding the influx of data centers connecting to the state grid and accompanying political backlash. The organization has also faced controversial efforts to address transmission congestion in West Texas and the Houston area and rising energy bills for customers across the state driven by natural disasters, transmission congestion and increasing demand. Statewide, electric rates have risen about 40% on average since 2020, up from an average residential rate of 11.50¢ per kWh in 2020 to 16.11¢ per kWh in 2026, according to data from independent electricity marketplace ElectricChoice. ERCOT operates as a nonprofit and is funded mostly by an administration fee of $0.61 per megawatt-hour, which is paid directly by retail electric providers and municipal utilities and typically passed on to their customers. ERCOT reduced its administration fee from $0.63 per MWh at the start of the year. ERCOT anticipates nearly $486 million in revenue in 2026, according to its 2026-2027 biennial budget. Vegas' base salary would be $1,162,716 under the proposed contract, but he could earn significantly more through short and long term incentives negotiated under the contract. Those incentives - 100% of Vegas' base salary for the short term incentive and 180% of the base salary for the long term incentive - would total about $3.3 million annually in additional pay, according to the contract presentation. The remaining amount of Vegas' compensation under the proposed contract would be made up by a deferred compensation arrangement, known as a 457(f) plan, and benefits. Without the make-whole payment, Vegas' compensation in 2027 would be $5,085,398, according to the contract presentation. The make-whole payment was negotiated under Vegas' 2022 contract to make up for foregone bonuses from Vegas' previous employer. That payment totals $6,684,000 spread across six years, the last of which will be paid in the first quarter of 2027, according to the contract presentation. Vegas was hired after ERCOT's last CEO, Bill Magness, was fired in the aftermath of the February 2021 power grid disaster, when the grid became overwhelmed during a strong winter storm that left millions of Texans without power. Hundreds of people died from the storm. Vegas was the executive vice president of NiSource Inc. and group president of the Indiana-based company's utilities prior to joining ERCOT in 2022. Vegas has long worked for energy companies and nonprofits, serving as president and chief operating officer for transmission company AEP Texas from 2008 to 2010. Vegas held a variety of other senior executive roles at AEP in addition to his two-year stint at the company's Texas branch. 2026 Texas Tribune

Texas is testing how much data center demand is real. Texas's AI infrastructure problem is no longer simply finding enough electricity. The state first has to determine which of the extraordinary amounts being requested actually represent projects capable of being built. Gov. Greg Abbott ordered Texas grid operator ERCOT and the Public Utility Commission of Texas to audit data centers seeking connections before allowing them to advance through the interconnection process. As of August 3, ERCOT was considering more than 474 GW of large-load requests, approximately 90% of which came from data centers, according to the governor's office. That theoretical queue is more than five times Texas's record electricity demand with ERCOT's all-time peak reaching 91.13 GW on July 22. Sponsored · Selkirk Copper Mines A recent Reuters review found more than 700 GW of large-load electricity requests across portions of the Midwest, Mid-Atlantic, and South, with most tied to data centers. Texas requests alone had risen from roughly 48 GW in 2023 to more than 474 GW. The figures are not forecasts that every project will be built. Utilities count prospective customers differently, and requests can include projects that lack firm financing, duplicate proposals seeking capacity from multiple providers, or developments that have not reached contractual commitments. Money starts shrinking the queue. Evidence from other markets shows how dramatically proposed demand can change once developers have to put capital behind their requests. For instance, American Electric Power's AEP Ohio, owned by American Electric Power, had received more than 30 GW of proposed data-center demand before Ohio approved a special data-center tariff. Sponsored · Altamira Gold Corp. When developers were required to pay for formal engineering studies, only 13.02 GW proceeded. And after AEP Ohio required service agreements, collateral, and other financial commitments, just 5.64 GW of that group signed binding contracts. AEP Ohio said the process was designed specifically to avoid building an oversized system around inaccurate demand estimates and passing the resulting costs to other customers. Exelon has seen a similar reset. Its estimate of "high probability" data-center demand fell nearly 40% from 18 GW at the end of 2025 to approximately 11 GW after its utilities began requiring transmission security agreements and collateral. About 4 GW of that demand is backed by agreements carrying roughly $1.00 billion in collateral, according to an Exelon filing. The company said its $41 billion capital program through 2029 was unchanged because speculative projects had not been incorporated into the plan. Texas moves the verification test up front. ERCOT had already created a new "Batch Zero" system to study large users of at least 75 MW collectively rather than project by project. In June, ERCOT said it was tracking more than 438 GW of large-load requests, with almost 89% coming from data centers. Abbott's August order moved verification ahead of that process. ERCOT subsequently delayed Batch Zero classifications while the audit is conducted. Projects must now provide additional information including ownership and controlling interests, electricity requirements, on-site generation plans, public incentives, water consumption, cooling technology, and community impacts. The cost issue had already reached the governor's office before the pause. In June, Abbott directed the PUCT to require data centers to fully fund electric infrastructure needed to serve their operations and said regulators should prevent development risks and costs from being shifted onto Texans. He also pledged to pursue legislation requiring data centers to contribute electricity capacity rather than only adding demand. Monitoring Analytics, the independent market monitor for PJM, calculated that existing and forecast data-center demand increased capacity-market costs by $29.40 billion across PJM's last four capacity auctions, according to Reuters. Texas's audit therefore addresses a different constraint in the AI infrastructure race. Even before utilities determine how to supply hundreds of gigawatts of prospective demand, regulators are demanding stronger evidence that the customers asking for that electricity will actually show up. Information for this briefing was found via the sources and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.