Transmission

High Level
The Department of Energy’s abrupt cancellation of a $4.9 billion loan guarantee for the Grain Belt Express transmission line sent shockwaves through the power sector this week. Though the project had state approvals, customer commitments, and active construction contracts, federal support was rescinded amid political pressure and anti-renewables sentiment. Meanwhile, California regulators advanced a controversial rule to expedite transmission-level interconnection for AI data centers, underscoring the inconsistency of infrastructure policy nationwide. These decisions reveal the deep tensions between reliability, landowner rights, and partisan perceptions of clean energy.

Full View

CPUC approves PG&E’s Electric Rule 30 to expedite transmission-level service for data centers
• What happened: The California Public Utilities Commission (CPUC) approved an interim version of PG&E’s Electric Rule 30, allowing large transmission-level retail customers such as AI data centers and EV charging hubs to pre-fund up to 100% of required upgrades and bypass traditional procedures to speed interconnection.
• Who did it: Pacific Gas and Electric (PG&E) proposed the rule; CPUC approved it on July 24, 2025.
• Why they did it: PG&E reported a 3,000% increase in transmission-level retail interconnection requests between 2023 and 2024, largely from data centers. The utility argued that the existing process required burdensome, case-by-case negotiations and lacked a standard mechanism to manage the surge in demand.
• Stakeholder views:
 • Manisha Lakhanpal, CPUC Administrative Law Judge: “This decision allows for interim implementation [of Electric Rule 30] for transmission-level customers who provide advance or actual cost payments and voluntarily prefund up to 100% of specific transmission network upgrades.”
 • Cal Advocates: called the rule “unjustified, premature and [one that] rushes the procedure without fully evaluating the impact on ratepayers.”
 • TURN: warned the plan would saddle ratepayers with systemwide costs driven by speculative data center growth.
• What happens next: The CPUC will issue a final decision on cost recovery, loan repayment terms, and refund eligibility for pre-funded upgrades. In the meantime, Rule 30 is active for customers willing to advance the full cost of infrastructure.
RTO Insider, July 27, 2025

DOE formally terminates $4.9 billion Grain Belt Express loan, citing financial risk and shifting priorities
• What happened: The U.S. Department of Energy officially terminated its conditional $4.9 billion loan guarantee for Invenergy’s Grain Belt Express transmission line, concluding the federal government’s financial support for one of the most ambitious renewable energy transmission projects in U.S. history.
• Who did it: The DOE Loan Programs Office announced the termination on July 23, 2025. The project is led by Invenergy.
• Why they did it: DOE stated that the loan terms were unlikely to be satisfied and that federal support was “not critical.” The termination followed a broader review of all clean energy loans issued between the 2024 election and the start of the new administration. DOE cited a desire to lower lending risk and prioritize “energy dominance” and affordability under Trump-era policy.
• Stakeholder views:
 • Sen. Josh Hawley (R-MO): called the project a “boondoggle” and an “elitist land grab,” crediting personal appeals to Trump and Energy Secretary Chris Wright for halting the loan.
 • Andrew Bailey, Missouri Attorney General: said the state had “won a major battle” and vowed continued legal resistance.
 • Garrett Hawkins, Missouri Farm Bureau President: said the decision validated rural opposition to eminent domain.
 • Laurie Williams, Sierra Club: warned the move undermines grid reliability and raises electricity costs.
 • Bob Keefe, Executive Director, E2: criticized the decision as “backward” amid growing demand.
 • Christina Hayes, Executive Director, Americans for a Clean Energy Grid: said the Grain Belt is “a critical opportunity to modernize the grid” and urged a “fresh look” at its value.
 • Jigar Shah, former DOE LPO Director: declared the decision “illegal” and contrary to statutory loan obligations.
 • DOE: said the cancellation demonstrates “responsible stewardship of taxpayer resources” and aligns with Trump’s commitment to “energy dominance.”
 • Invenergy spokesperson: said the project will proceed privately and create jobs, savings, and resilience benefits.
• What happens next: Invenergy continues to pursue the project without federal support. Despite signed contracts and state approvals, it still faces unresolved litigation, eminent domain resistance, and regulatory scrutiny in multiple states.
DOE Press Release, July 23, 2025
Straight Arrow News, July 24, 2025
Daily Climate, July 27, 2025
Associated Press, July 23, 2025
Reuters, July 23, 2025
Canary Media, July 23, 2025

What’s the So What?

The cancellation of the Grain Belt Express loan is the clearest possible signal that federal energy infrastructure policy has detached from grid reliability, market efficiency, and consumer cost savings. Despite having approvals from four state regulators, signed customer agreements, and an executed $1.7 billion construction contract, Grain Belt lost its federal backstop because it conflicted with the Trump administration’s ideological stance against renewables.

This decision is not just about one line. It destabilizes a decade’s worth of federal transmission planning and investment strategy. It undermines the Loan Programs Office’s credibility and calls into question whether any clean energy project can expect procedural continuity under shifting administrations.

The legal basis for the cancellation is disputed. Former LPO Director Jigar Shah, who oversaw the commitment, asserts DOE was obligated to close the loan once conditions were met. If true, this is not just poor energy policy—it is regulatory sabotage.

More broadly, the move contradicts the administration’s own claims to prioritize reliability. Grain Belt would have delivered 5 GW of dispatchable power across four regional grids, including PJM, with a proven business case and measurable ratepayer savings. Walking away from that is not about protecting taxpayers—it is about punishing renewables.

Meanwhile, in California, the CPUC is taking the opposite approach: greenlighting expedited cost-backed interconnections for AI-driven load. That decision has its own flaws, but at least it acknowledges reality: the grid needs to be built, and someone has to pay for it.

The contrast is stark. In one state, regulators are trying to solve problems. In Washington, they are creating new ones. If transmission buildout remains hostage to political whiplash, the U.S. will fall further behind on climate goals, grid reliability, and economic competitiveness.

Bibliography
RTO Insider. “CPUC OKs New PG&E Rule to Speed Tx Connections for AI Data Centers.” July 27, 2025. https://www.rtoinsider.com/111024-cpuc-approves-new-electric-rule-data-centers-transmission/
U.S. Department of Energy. “Department of Energy Terminates Taxpayer-Funded Financial Assistance for Grain Belt Express.” July 23, 2025. https://www.energy.gov/articles/department-energy-terminates-taxpayer-funded-financial-assistance-grain-belt-express
Straight Arrow News. “Grain Belt Express loses $4.9 billion loan.” July 24, 2025. https://san.com/cc/major-midwest-transmission-line-grain-belt-express-loses-4-9-billion-loan/
Daily Climate. “DOE drops $4.9 billion loan for Grain Belt Express.” July 27, 2025. https://www.dailyclimate.org/energy-department-drops-4-9-billion-loan-for-grain-belt-express-transmission-line-2673753859.html
Associated Press. “Trump administration canceled a $4.9B loan guarantee for a line to deliver green power.” July 23, 2025. https://apnews.com/article/green-energy-transmission-line-grain-belt-express-6d674ba10fc2d5700133989695e838ec
Reuters. “Trump axes loan for Grain Belt power transmission project.” July 23, 2025. https://www.reuters.com/business/energy/trump-axes-loan-grain-belt-power-transmission-project-2025-07-23/
Canary Media. “Trump admin cancels $4.9B loan for biggest transmission line in US.” July 23, 2025. https://www.canarymedia.com/articles/transmission/grain-belt-express-trump-loan-canceled