Private investment in electricity grids offers hope for improvements. Here’s why.

The first thing to know about the electric grid is that electrons are agnostic about who pays for the electric superhighway that connects generators with substations and ultimately customers. Electrons follow the laws of physics.

The second thing to know about the electric grid is that customers very much care about who pays for that electric superhighway. Traditionally captive customers, often referred to as ratepayers in regulatory parlance, get stuck with the bill when big utilities make investments in the grid.

Recently, however, the Louisiana Public Service Commission approved a multibillion-dollar grid project — Southern Spirit — that suggests a different model for financing construction: one where the developer bears the risk and costs of building the project.

At the end of 2024, the commission reached a settlement to approve the Southern Spirit Transmission Project, a near 320-mile ±525 KV, 3,000 MW high voltage direct current transmission line connecting Electric Reliability Council of Texas, Inc. and southeastern transmission grids. Conservatively speaking, 3,000 megawatts of transmission capacity provide a pathway to serve approximately 600,000 homes.

The agreement follows a model that will increase grid reliability and access to affordable renewable energy by using private investment, rather than committing ratepayer dollars to the grid project. This project will provide benefits to multiple regions across the Southeast.

The project is designed to enhance grid resiliency during severe weather and extreme power usage events while also adding to electric diversification to help drive down rates. It is geared to address growing power demand by supplying reliable power to the ERCOT and southeastern grids.