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The roughly 550-mile SunZia power line is crucial to America’s climate goals. Here’s how it almost didn’t happen — and how it was saved.
Two years ago, John Podesta met with Jennifer Granholm, the U.S. Secretary of Energy. Podesta, a longtime Democratic aide, had just started a new role in the Biden administration, overseeing the Inflation Reduction Act’s implementation, and he was going to meet with Granholm about high-priority clean electricity infrastructure.
First on the agenda was a list of transmission projects to ferry electricity from wind and solar farms to cities and suburbs where it would actually be used.
“Up pops the list,” Podesta told me later. The first project was a line called SunZia.
“My jaw dropped,” he said. “I thought we solved that in 2014!”
No, no, Granholm said. There had been twists and turns. But now it was back.
If you want to understand why the United States can’t build infrastructure, look at SunZia.
Envisioned as a roughly 550-mile high-voltage transmission line connecting a sprawling 900-turbine wind farm in central New Mexico to the growing cities of Arizona and California, SunZia is — according to its developer — one of the largest electricity projects in American history. When it’s finished, the line will deliver 4,500 megawatts of electricity to consumers. Only two power plants nationwide produce more: the Grand Coulee Dam in Washington, and the Vogtle nuclear power plant in Georgia.
“It’s the largest clean energy project in America, and I think the largest clean energy project in the Americas,” Podesta told me. “It’s huge.”
For nearly two decades, SunZia has bounced through successive stages of regulatory review, financial restructuring, and litigation. It has been fought over, bought, sold, and at one point, forcibly relocated by the Department of Defense. Today, 18 years after it was first conceived, it is finally under construction. At least one outstanding lawsuit is contesting its right of way. If all goes according to the current plan, SunZia will begin to deliver power to consumers in 2026.
SunZia’s timeline would present an inconvenience — arguably an embarrassment — in any context. In this particular context, it could even invoke despair. “It’s a classic example of how we’ve gotten excellent at stopping things in America, and if we’re going to take the climate crisis seriously, we have to get excellent at building things in America,” Podesta said.
The stakes are far larger than electricity bills. The United States has pledged to reach net zero greenhouse gas emissions by 2050. Reaching that target will require tripling the size of America’s power grid in the next 26 years, according to Princeton University’s Net Zero America study. If America were to power its grid entirely with renewable energy — a feat that many experts doubt is possible — then it would need a grid five times as large as what it has now.
Even if that study (led by my podcast co-host, Jesse Jenkins) overstates the need for new transmission, the mechanics of renewables dictate that the country must hook up its existing grid to the places where the sun shines brightest and the wind blows hardest. The Desert Southwest — and New Mexico specifically — features some of America’s richest solar and wind resources. To decarbonize America, that energy must be harvested and transported from these largely unpopulated areas to the dense urban centers where people actually live.
That is easier said than done. Although transmission projects are unusually important for climate change, they are also unusually difficult to build, especially compared to fossil fuel infrastructure. Or, well, not difficult to build, exactly — it’s just a big power line, and we know how to put those up — but difficult to get permission to build. Ultimately, that permission is in the hands of the government. But when it comes to long, linear infrastructure projects like power lines, there isn’t really a single “government” to talk about it with in the first place.
To build a transmission line, a developer has to secure permission from every state, county, city, and property owner along the route. If any of them denies the project, poison-pills it with endless requirements, or even sits on an application, then the entire project stalls. (Building a natural gas pipeline, by contrast, requires getting permission only from a single federal agency.) Electricity utilities don’t usually like transmission lines because they erode their local monopoly over power generation and distribution. Those utilities have such great influence at the state and local level — through outright lobbying and by funding local Little League teams, churches, and more — that they can often convince politicians and regulators to slow down or block a line.
For these reasons and more, America’s rate of new transmission construction has plummeted over the past few decades. In this history of stasis, though, SunZia presents a special case. SunZia is such a high-profile project that its enormous delays have terrified the rest of its small industry. If SunZia was defeated nearly 20 years after it was first proposed, then it could render the field un-investable, one investor confided to me.
Yet for all the hand wringing, SunZia is a success story. It has now fought off its most credible lawsuits, meaning that it is likely to get built. Within two years, huge amounts of climate-friendly electricity could be coursing through the American desert.
Earlier this year, I went to Arizona to examine more closely why SunZia has been so difficult to build and what finally allowed it to move forward. I spoke to the SunZia’s developer and the environmentalists who support the project — as well as those who oppose it. The question I was trying to answer: What did it get right? If America is going to reach its climate goals, learning those lessons — and learning them well — is going to be crucial. When SunZia is completed and running at full blast, it will generate roughly 1% of the country’s electricity needs. After that, to fully decarbonize the electricity sector, we will need to run it all back 99 more times.
The saga of SunZia begins in the summer of 2006, when representatives from utilities, developers, and government agencies from across the Southwest gathered to discuss expanding the region’s power grid. After looking at energy and economic data, the group decided that Arizona and New Mexico needed a powerful new transmission line to connect the swelling populations in the west with New Mexico’s abundant wind and solar potential.
The Southwest Power Group, a Phoenix-based energy company that had attended the conference, soon put together an ownership team of four utilities and stepped in to lead the project. They christened the line “SunZia,” after the setting sun on Arizona’s flag and the sign of the Zia people on New Mexico’s flag.
In June 2008, Southwest Power Group applied to the Bureau of Land Management, or the BLM, the national agency tasked with managing federal lands, for the right to build a major new transmission line across the two states. “Local, state, and federal permitting efforts will begin immediately,” the coalition announced in an optimistic press release.
The first phase of SunZia was expected to initiate commercial operation by 2013, the developers added.
Back then, when a developer tried to build a transmission line, they had a strong but not definitive sense of the route — in part because the federal government could ask them to change it if needed. Under the National Environmental Policy Act, the government must study how infrastructure projects — or, really, any federal action — affect the environment, inviting input from local governments, environmental groups, and nearby Native American nations. (That law does not require the government to protect the environment in any substantive way; it simply requires that it consult everyone and study a project’s impact.)
Heatmap Illustration/Pattern Energy
Southwest Power Group knew that SunZia would begin in central New Mexico, southeast of Albuquerque, and that it would eventually connect to a large-scale renewable project there. (At the time, the vast wind farm hadn’t yet been planned.) Then it would proceed due west, passing below Albuquerque, before veering southwest and passing north of the White Sands Missile Range. After that, SunZia would turn west again, eventually crossing into Arizona. It would pass near Tucson, Arizona — the exact route was uncertain — before finally turning north again and terminating in a substation in Phoenix’s southeastern suburbs. From there, the existing grid could ferry electricity into Phoenix or further toward California.
This route presented many difficulties, but two river crossings dominated concerns over the project.
First, SunZia had to cross the Rio Grande. Although that river is best-known back East for forming the U.S.-Mexico border, it begins in the Colorado Rockies and flows in a southerly direction through New Mexico, bisecting the state. In other words, you cannot cross New Mexico without crossing the river.
The Rio Grande creates an environment in New Mexico unlike anywhere else in the United States: a high-desert wetlands, where hundreds of thousands of birds from across North America spend the winter. The BLM and the Southwest Power Group decided that SunZia would shoot through a small gap between two wildlife refuges — the Sevilleta National Wildlife Refuge to the north, and the Bosque Del Apache National Wildlife Refuge to the south — that had been formed to protect these birds.
Second, SunZia would have to pass near Tucson, Arizona by one of three routes, each of which required some kind of sacrifice. The first option involved running the line alongside an existing 345 kilovolt transmission line that passed to the city’s south and west. But the city and county opposed that route, and it required securing a permit to cross the Tohono O’odham Nation’s land, which the tribe refused to allow.
That left two remaining routes. One option ran near the center of Tucson, passing very close to overwhelmingly poor and Latino neighborhoods. This route raised “environmental justice” concerns, the BLM said, in that it forced poor people of color who already live alongside energy infrastructure to bear even greater environmental costs for it. The other choice was to run SunZia east of Tucson and through the beautiful San Pedro Valley, one of the most pristine desert ecosystems remaining in Arizona. Although vast swaths of that valley are privately owned, Native American relics and cultural sites dot its landscape.
Forced to choose between harming civil rights or damaging the environment, the BLM reluctantly chose the latter. But to blunt some of the damage to the valley, the bureau directed the developers to follow existing pipelines or transmission lines for more than 40% of its mileage. It also ordered SunZia to commission studies of archeological sites along the route’s path so they could be mitigated or avoided entirely. (SunZia would later adjust its route to avoid some of the most archaeologically sensitive sites.)
Studying these options took much longer than the Southwest Power Group had ever imagined. The Bureau of Land Management published its final environmental study on SunZia in June 2013 — the same year SunZia was once due to begin operation. Southwest Power Group was finally ready to start construction. Then the Pentagon stepped in.
Scarcely a month after SunZia’s course was finalized through New Mexico, the Pentagon filed a formal protest. The approved route passed way too close to the White Sands Missile Range, the complaint said, and the BLM had “not adequately analyzed the significant risks to national security” that would result from building it.
The White Sands Missile Range is the country’s largest military installation and is vital to New Mexico’s economy. By suggesting that SunZia might imperil the base’s activities, the Pentagon was at risk of killing the project. But something about that claim didn’t sit right with Senator Martin Heinrich, a first-term Democrat and former Albuquerque city councilman. Heinrich was an engineer by training, and his father had been a utility lineman, giving him at least some familiarity with how the power grid worked. Why did a big power line threaten the military base miles away? He asked MIT’s Lincoln Laboratory to investigate whether the line would damage the base as much as the Pentagon said.
Six months later, in March 2014, the study was completed. According to news stories at the time, the classified study found that SunZia would impair the base’s activities, but that its effects could be mitigated. After months of intense negotiations with the White House, the Pentagon, the Department of the Interior, and Senator Heinrich’s office, Southwest Power Group agreed to bury five miles of the power line — an expensive solution, but one that would allow the project to move forward.
By that point, however, SunZia had captured the public’s attention and polarized New Mexicans. The state’s Republicans gleefully undermined the project in the press. As the Obama administration prepared to approve the line, a Republican congressman and former oil company CEO intoned that SunZia would “permanently damage” national security.
“Greenlighting the completion of SunZia along the chosen route is a reckless rush to judgment without thorough examination,” the congressman, Steve Pearce, said. (The federal government had, by this point, been studying SunZia for seven years.) He worried too that the line would “potentially destroy ancient Pueblo sites.”
In 2015, the Obama administration finally approved SunZia’s route. After nearly a decade, Southwest Power Group had the federal government’s permission to build SunZia.
But that was only the first step: Now, the company had to secure state and local permits. That would prove even more confounding.
The truth is that New Mexico’s environmentalists had never been comfortable with what SunZia would mean for the state’s wildlife. They hated the Rio Grande crossing. They were particularly stressed about what the structure might mean for sandhill cranes, a regal and crimson-headed bird that migrates to New Mexico from as far away as Alaska and Siberia. Few sights are more treasured by the region’s birders than the vast flocks of cranes that form in the Bosque del Apache Wildlife Refuge each winter.
Birders imagined that SunZia’s towers and low-hanging wires could maim or kill the elegant cranes. If SunZia could bury the line to help White Sands Missile Range, people asked, why couldn’t they also bury it below the Rio Grande and save some birds? They whispered, too, that the line would transmit not wind-generated electricity as promised, but rather gas-fired electricity from a power plant owned by Southwest Power Group.
When Southwest Power Group applied for a state permit to cross the Rio Grande, the birders’ moment came. The developers were still finalizing construction details and didn’t seem to have a strong sense of where exactly the line would go. In 2018, New Mexico’s utility commission rejected the permit and asked the Southwest Power Group to come back with more information.
SunZia was flailing. Building the line had taken much longer than Southwest Power Group had ever envisioned. Burying the line, even for a few miles, had made it a much more costly project. Now environmentalists doubted that it would help fight climate change at all and were making increasingly expensive demands.
Then a new company came into the picture: Pattern Energy, a San Francisco-based energy developer partially owned by Canadian pension funds. Pattern promised to build a vast wind farm — comprising more than 900 turbines — at SunZia’s eastern end. It became the line’s “anchor tenant,” in the jargon of energy developers, and, more importantly, the project’s public face.
“They came in, and they were quite honestly pretty frustrated with the way that [the SunZia project] had approached community engagement and talking with environmental groups,” Jon Hayes, a wildlife biologist and the executive director of Audubon Southwest, told me. Up to that point, SunZia had been the story of an “industry just trying to push their lowest-cost alternative through sensitive areas,” he said.
But Pattern behaved differently. “Why it was a success is that Pattern acted and negotiated it in good faith with us,” Hayes said.
Pattern hired researchers to study how and where the cranes fly. It agreed to install infrared lights on SunZia’s towers as an “avian avoidance system” that will be visible to cranes and make the lines shimmer in the dark. It bought a nearby farm to create a sandhill crane reservation (the cranes also eat corn from the fields) and donated the water rights to local conservation organizations. When a coalition of environmentalists, including Audubon, asked it to study the benefits of burying SunZia, Pattern warned that doing so could permanently alter the project’s economics — but they studied it anyway. Burying the line would ultimately have been more disruptive than building lines, Hayes said.
Heinrich’s office continued its involvement in the negotiation and also helped move the process along. Environmental groups that had initially opposed the project switched their allegiance, Audubon Southwest included.
Pattern’s research led it to conclude that the line should be moved into Serivetta National Wildlife Refuge so it could be co-located with another transmission line. (Moving it inside the refuge would also, counterintuitively, avoid the largest bird populations.) When Pattern brought the new route to local environmentalists and the Audubon Society, the conservationists agreed. Pattern then took the extraordinary step of applying to the BLM for a new route through New Mexico. By adopting the new route, SunZia could also avoid the White Sands Missile Range entirely, avoiding the costly need to bury the line.
Cary Kottler, Pattern’s chief development officer, told me that the project’s pre-existing climate credentials incentivized it to find ways to make SunZia more environmentally sound. “I think we did figure out a way for environmental groups to support infrastructure, which has not always been the case in the past,” he said.
“Pattern being a company that was willing to have discussions with us in good faith — and that conversation happening before the re-permitting process — was, I think, really important,” Hayes agreed.
Heinrich echoed that thought in a statement. “I am especially proud of our work to engage local communities, conservation organizations, and other stakeholders to find pathways forward while securing strong economic and conservation benefits for New Mexico,” he told me. He also thanked the BLM, the U.S. Fish and Wildlife Service, and Pattern Energy, for their “hard work and collaborative approach.”
“I firmly believe that when we work together, we can build big things in this country,” the senator said. “SunZia will have a massive economic impact in New Mexico while bringing us one major step closer to meeting our climate goals and conserving wildlife habitat.”
In 2020, Pattern entered into a deal with New Mexico’s Renewable Electricity Transmission Authority, a state agency meant to encourage long-distance power lines. The deal allowed New Mexico to reap some of the benefits of owning SunZia, and it spared SunZia from some scrutiny under state permitting law. It had taken 14 years, but SunZia was finally ready to build in New Mexico. It still had to tackle Arizona.
Pattern Energy bought SunZia outright from Southwest Power Group in 2021, and outside fundraising began to pile in. Last year, Pattern Energy announced that it had secured $11.5 billion in financing for the line, making SunZia the largest clean infrastructure project in dollar terms in American history.
But the line’s journey through Arizona — and specifically the San Pedro Valley — has remained controversial.
The San Pedro Valley.Robinson Meyer
Throughout last year, a coalition of environmental groups, local property owners, and two tribes — the Tohono O'odham Nation and the San Carlos Apache Tribe — pushed for the project to avoid the San Pedro Valley, alleging that the BLM had failed to study how SunZia would affect the landscape’s cultural value to Native Americans. In November, the BLM ordered Pattern Energy to pause construction on SunZia so that it could consult with the tribes again; the groups held a series of meetings in the fall.
But the tribes deemed that effort insufficient. In January, the Tohono O'odham and San Carlos Apache Tribe, along with the Center for Biological Diversity and Archaeology Southwest, sued BLM, alleging that it had not studied how SunZia would erode the valley’s cultural value.
Their argument turned on the interplay of two federal laws: NEPA, the law that governs the federal permitting process; and the National Historic Preservation Act, which says that the government must evaluate how its actions will affect archeological sites and Native American cultural sites.
If an infrastructure project will destroy an archeological or cultural site, the National Historic Preservation Act says that the government must mitigate that harm, mapping the relics and preserving what it can from them. Pattern and the BLM say that they have followed this law. After mapping and mitigating archaeological sites along its route, they agreed to move the line to avoid some of the most sensitive areas.
But the tribes argue that the entire San Pedro Valley is a sensitive cultural area. The Tohono O’odham Nation has argued in court and in the press that SunZia abuses its cultural property not by destroying any one cultural site, but rather by entering the San Pedro Valley in the first place. In essence, the tribe is claiming that the entire valley is a cultural site unto itself.
They say that the BLM must do what’s called a “cultural landscape” study, investigating not only discrete archeological sites along the route but the cultural value of the San Pedro Valley as a whole. “The tribes have been trying to say that this [valley] has central cultural and religious importance,” Robin Silver, an Arizona resident and the cofounder of the Center for Biological Diversity, told me.
Their argument was legally daring. The federal government approved SunZia’s route through the San Pedro Valley under NEPA in 2015, meaning that the six-year statute of limitations for that decision had already expired. But the National Historic Preservation Act process only wrapped up last year. The tribes and the environmental groups argue that if that law’s process had been correctly followed, then the BLM would have been forced to change SunZia’s route — even though doing so would essentially re-open the NEPA process.
“Pattern Energy and the Bureau of Land Management, all they do is hire consultants that confuse hard archaeology with anthropology. So they go out and dig in front of the bulldozers and say everything’s fine,” Silver said. “The fact of the landforms having significant cultural and religious importance has been here as long as the tribes have been here. It’s just that when Manifest Destiny became the rule of law, tribal concerns were blown off, and they’re still being blown off.”
The coalition’s argument also raised the specter of old trade-offs — trade-offs that the tribe, by focusing on procedural and cultural matters, did not address in its lawsuit. The San Pedro Valley is incredibly beautiful, for instance, but it is not completely pristine: It is already home to a large natural gas pipeline and a few smaller transmission lines. When I asked Silver why the pipeline did not destroy the valley, but the transmission line did, he said in essence that the pipeline did not have the same visual impact as SunZia.
“There are no 200-foot large power lines going through the San Pedro Valley,” he said. “The gas pipeline doesn’t have 200 foot towers.”
I pointed out that this suggested fossil fuel projects would never face the same scrutiny as transmission lines. “We need to figure out a way to connect the sources of our new energy to the users, and our grid is woefully archaic. No argument,” he added. “But we don’t need to go up every single valley, we don’t need to sacrifice everything else, because of this mantra of climate change.”
Yet there is no way to upgrade the grid without building large transmission towers somewhere. Silver suggested that the line could be shifted back toward Tucson, but that would seemingly place it back into the low-income, majority-Latino neighborhoods that BLM had hoped to avoid in the first place. The other available route would be to run SunZia west of Tucson, but that would force the line onto Tohono O’odham Nation land. When I asked a tribal spokesperson if the tribe had lifted its decade-old ban on SunZia crossing its land, he didn’t respond.
In fact, the Tohono O’odham Nation has not responded to multiple emails and calls requesting comment beginning in March.
Two weeks ago, a district court judge in Arizona tossed the tribe’s lawsuit. She said that the statute of limitations had expired and SunZia’s route could no longer be altered. While BLM had once suggested that it would do a cultural landscape study on the San Pedro Valley, it did not do so in a way that would change its obligation to the tribes, she ruled. Silver told me that the coalition will appeal.
SunZia hasn’t made it out of the desert yet. It still has to clear at least one remaining legal challenge, a lawsuit brought by the Center for Biological Diversity and its allies in Arizona state court. But with the federal lawsuit against it dismissed last month, SunZia now seems more likely than ever to become complete, making it a key piece of American zero-carbon infrastructure.
Which raises the inevitable question: Could SunZia have succeeded more quickly? SunZia required no fundamental technological leaps or engineering miracles; we have known how to build a power line of its size and length for years. Yet just the permitting has taken nearly two decades. If we finally get SunZia in 2026, that means that we could have had it in 2016. And that means that we could have burned less natural gas to meet the country’s electricity needs, or at least enjoyed more energy, for lower prices, with less pollution. America’s ponderous approach to building infrastructure is often described as an economic problem. But climate change transforms that regulatory torpor into an environmental challenge. What can we learn from SunZia such that we never have to go through this again?
You can see SunZia — as many in New Mexico now do — as a lesson in different approaches to building big new infrastructure projects. Many interests across the Southwest were unhappy with SunZia’s initial route in 2013. But in New Mexico, the Pentagon’s formal protest to that route led — quite happily — to Pattern Energy, Audubon Southwest, and environmental advocates working out a better plan for everyone involved. In Arizona, meanwhile, the old plans never changed, the same contentiousness remained, and they ultimately gave rise to a lawsuit.
You could also see it as a lesson in political power. Silver, the Center for Biological Diversity cofounder, told me SunZia succeeded in New Mexico for one reason: “Martin Heinrich.” Speaking with a mix of resentment and respect, Silver said that Heinrich pushed for negotiations between environmentalists, clean energy advocates, tribes, and the Defense Department, eventually nudging those groups to arrive at a mutually agreeable outcome. In Arizona, Silver said, national and state-level leaders have not taken the same hands-on approach, so the process has been much more acrimonious.
There’s some truth to each of these views. To get large-scale infrastructure projects done, it clearly helps to have a federal chaperone — someone who can spur cities, states, tribes, and conservation groups toward a final and constructive conclusion. The Biden administration is playing that role now for some projects, although it lacks local credibility, and Congress has helped to standardize the process by creating a “Fast 41” process where the government can prod along stalled infrastructure efforts.
But there is also something substantively different in New Mexico — you could call it high trust, good will, or a solutions-oriented approach to problem solving. It certainly helped that Pattern Energy was willing to work in good faith with local environmental groups. But that only works if all the other key stakeholders, including environmentalists themselves, respond in kind. The current tangle of state, local, and federal laws that dictate infrastructure permitting do not encourage this kind of constructive engagement, pushing opponents instead toward prolonged and costly legal battles. These laws also fail to substantively protect the environment, guaranteeing only that a process gets followed — not that the environment gets protected.
For decades, developers and conservationists have attacked each other over every project and prepared to fight bitter court battles over every detail. Developers assumed that conservation groups were out to block them at every turn and shut down, even when members of the public asked worthy questions. Environmentalists, meanwhile, suspected that any developers would destroy the land if given the opportunity, whether they were putting in oil pipelines or transmission lines, and would accept no protest to the contrary.
SunZia’s story repeats this old, messy tradition, while also laying the model for a new one — one in which clean energy builders and environmental protectors work together to find the best solution for the environment and the climate. We will need many more success stories like it if America is to meet its climate goals — 99 more, to be exact.
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You’ve probably noticed — even Trump has noticed — but the reason why is as complicated as the grid itself.
You’re not imagining things: Electricity prices are surging.
Electricity rates, which have increased steadily since the pandemic, are now on a serious upward tear. Over the past 12 months, power prices have increased more than twice as fast as inflation, according to recent government data. They will likely keep rising in years to come as new data centers and factories connect to the power grid.
That surge is a major problem for the economy — and for President Trump. On the campaign trail, Trump vowed to cut Americans’ electricity bills in half within his first year in office. “Your electric bill — including cars, air conditioning, heating, everything, your total electric bill — will be 50% less. We’re going to cut it in half,” he said.
Now Trump has mysteriously stopped talking about that pledge, and on Tuesday he blamed renewables for rising electricity rates. Even Trump’s Secretary of Energy Chris Wright has acknowledged that costs are doing the opposite of what the president has promised.
Trump’s promise to cut electricity rates in half was always ridiculous. But while his administration is likely making the electricity crisis worse, the roots of our current power shock did not begin in January.
Why has electricity gotten so much more expensive over the past five years? The answer, despite what the president might say, isn’t renewables. It has far more to do with the part of the power grid you’re most familiar with: the poles and wires outside your window.
Before we begin, a warning: Electricity prices are weird.
In most of the U.S. economy, markets set prices for goods and services in response to supply and demand. But electricity prices emerge from a complicated mix of regulation, fuel costs, and wholesale auction. In general, electricity rates need to cover the costs of running the electricity system — and that turns out to be a complicated task.
You can split costs associated with the electricity system into three broad segments. The biggest and traditionally the most expensive part of the grid is generation — the power plants and the fuels needed to run them. The second category is transmission, which moves electricity across long distances and delivers it to local substations. The final category is distribution, the poles and wires that get electricity the “the last mile” to homes and businesses. (You can think of transmission as the highways for electricity and distribution as the local roads.)
In some states, especially those in the Southeast and Mountain West, monopoly electricity companies run the entire power grid — generation, transmission, and distribution. A quasi-judicial body of state officials regulates what this monopoly can do and what it can charge consumers. These monopoly utilities are supposed to make long-term decisions in partnership with these state commissions, and they must get their permission before they can raise electricity rates. But when fuel costs go up for their power plants — such as when natural gas or oil prices spike — they can often “pass through” those costs directly to consumers.
In other states, such as California or those in the Mid-Atlantic, electricity bills are split in two. The “generation” part of the bill is set through regulated electricity auctions that feature many different power plants and power companies. The market, in other words, sets generation costs. But the local power grid — the infrastructure that delivers electricity to customers — cannot be handled by a market, so it is managed by utilities that cover a particular service area. These local “transmission and distribution” utilities must get state regulators’ approval when they raise rates for their part of the bill.
The biggest driver of the power grid’s rising costs is … the power grid itself.
Historically, generation — building new power plants, and buying the fuel to run them — has driven the lion’s share of electricity rates. But since the pandemic, the cost of building the distribution system has ballooned.
Electricity costs are “now becoming a wires story and less of an electrons story,” Madalsa Singh, an economist at the University of California Santa Barbara, told me. In 2023, distribution made up nearly half of all utility spending, up from 37% in 2019, according to a recent Lawrence Berkeley National Laboratory report.
Where are these higher costs coming from? When you look under the hood, the possibly surprising answer is: the poles and wires themselves. Utilities spent roughly $6 billion more on “overhead poles, towers, and conductors” in 2023 than in 2019, according to the Lawrence Berkeley report. Spending on underground power lines — which are especially important out West to avoid sparking a wildfire — increased by about $4 billion over the same period.
Spending on transformers also surged. Transformers, which connect different circuits on the grid and keep the flow of electricity constant, are a crucial piece of transmission and distribution infrastructure. But they’ve been in critically short supply more or less since the supply chain crunch of the pandemic. Utility spending on transformers has more than doubled since 2019, according to Wood Mackenzie.
At least some of the costs are hitting because the grid is just old, Singh said. As equipment reaches the end of its life, it needs to be upgraded and hardened. But it’s not completely clear why that spike in distribution costs is happening now as opposed to in the 2010s, when the grid was almost as old and in need of repair as it was now.
Some observers have argued that for-profit utilities are “goldplating” distribution infrastructure, spending more on poles and wires because they know that customers will ultimately foot the bill for them. But when Singh studied California power companies, she found that even government-run utilities — i.e. utilities without private investors to satisfy — are now spending more on distribution than they used to, too. Distribution costs, in other words, seem to be going up for everyone.
Sprawling suburbs in some states may be driving some of those costs, she added. In California, people have pushed farther out into semi-developed or rural land in order to find cheaper housing. Because investor-owned utilities have a legal obligation to get wires and electricity to everyone in their service area, these new and more distant housing developments might be more expensive to connect to the grid than older ones.
These higher costs will usually appear on the “transmission and distribution” part of your power bill — the “wires” part, if it is broken out. What’s interesting is that as a share of total utility investment, virtually all of the cost inflation is happening on the distribution side of that ledger. While transmission costs have fluctuated year to year, they have hovered around 20% of total utility investment since 2019, according to the Lawrence Berkeley Labs report.
Higher transmission spending might eventually bring down electricity rates because it could allow utilities to access cheaper power in neighboring service areas — or connect to distant solar or wind projects. (If renewables were driving up power prices as the president claims, you might see it here, in the “transmission” part of the bill.) But Charles Hua, the founder and executive director of the think tank PowerLines, said that even now, most utilities are building out their local grids, not connecting to power projects that are farther away.
The second biggest driver of higher electricity costs is disasters — natural and otherwise.
In California, ratepayers are now partially footing the bill for higher insurance costs associated with the risk of a grid-initiated wildfire, Sam Kozell, a researcher at the E9 Insight, told me. Utilities also face higher costs whenever they rebuild the grid after a wildfire because they install sensors and software in their infrastructure that might help avoid the next blaze.
Similar stories are playing out elsewhere. Although the exact hazards vary region by region, some utilities and power grids have had to pay steep costs to rebuild from disasters or prevent the likelihood of the next one occurring.
In the Southeast, for instance, severe storms and hurricanes have knocked out huge swaths of the distribution grid, requiring emergency line crews to come in and rebuild. Those one-time, storm-induced costs then get recovered through higher utility rates over time.
Why have costs gone up so much this decade? Wildfires seem to grow faster now because of climate change — but wildfires in California are also primed to burn by a century of built-up fuel in forests. The increased disaster costs may also be partially the result of the bad luck of where storms happen to hit. Relatively few hurricanes made landfall in the U.S. during the 2010s — just 13, most of which happened in the second half of the decade. Eleven hurricanes have already come ashore in the 2020s.
Because fuel costs are broadly seen as outside a utility’s control, regulators generally give utilities more leeway to pass those costs directly through to customers. So when fuel prices go up, so do rates in many cases.
The most important fuel for the American power grid is natural gas, which produces more than 40% of American electricity. In 2022, surging demand and rising European imports caused American natural gas prices to increase more than 140%. But it can take time for a rise of that magnitude to work its way to consumers, and it can take even longer for electricity prices to come back down.
Although natural gas prices returned to pre-pandemic levels by 2023, utilities paid 30% more for fuel and energy that year than they did in 2019, according to Lawrence Berkeley National Lab. That’s because higher fuel costs do not immediately get processed in power bills.
The ultimate impact of these price shocks can be profound. North Carolina’s electricity rates rose from 2017 to 2024, for instance, largely because of natural gas price hikes, according to an Environmental Defense Fund analysis.
The final contributor to higher power costs is the one that has attracted the most worry in the mainstream press: There is already more demand for electricity than there used to be.
A cascade of new data centers coming onto the grid will use up any spare electron they can get. In some regions, such as the Mid-Atlantic’s PJM power grid, these new data centers are beginning to drive up costs by increasing power prices in the capacity market, an annual auction to lock in adequate supply for moments of peak demand. Data centers added $9.4 billion in costs last year, according to an independent market monitor.
Under PJM’s rules, it will take several years for these capacity auction prices to work their way completely into consumer prices — but the process has already started. Hua told me that the power bill for his one-bedroom apartment in Washington, D.C., has risen over the past year thanks largely to these coming demand shocks. (The Mid-Atlantic grid implemented a capacity-auction price cap this year to try to limit future spikes.)
Across the country, wherever data centers have been hooked up to the grid but have not supplied or purchased their own around-the-clock power, costs will probably rise for consumers. But it will take some time for those costs to be felt.
In order to meet that demand, utilities and power providers will need to build more power plants, transmission lines, and — yes — poles and wires in the years to come. But recent Trump administration policies will make this harder. The reconciliation bill’s termination of wind and solar tax credits, its tariffs on electrical equipment, and a new swathe of anti-renewable regulations will make it much more expensive to add new power capacity to the strained grid. All those costs will eventually hit power bills, too, even if it takes a few years.
“We're just getting started in terms of price increases, and nothing the federal administration is doing ‘to assure American energy dominance’ is working in the right direction,” Kozell said. “They’re increasing all the headwinds.”
Big electric vehicles need big batteries — and as electricity gets more expensive, charging them is getting pricier.
As the cost to charge the Rivian R1S ticked up over $50, then $60, I couldn’t help but recall those “Pain at the Pump” segments from the local news. Perhaps you’ve seen the familiar clips where reporters camp out at the local filling station to interview locals fed up with high gas prices. I watched the Rivian charger’s touchscreen as the cost to refuel my weekend test-driver ballooned and imagined the chemically dewrinkled TV anchors doing their first story on “Pain at the Plug.”
I should have been ready for this. Back in the 90s, I remember the shock of filling my parents’ gas-guzzling Ford Explorer, which cost two or three times as much as it took to fill my dinky Escort hatchback. The story isn’t the same in the age of electric vehicles, but it rhymes. It rarely costs more than $20 to top off the small battery in my Tesla Model 3, so my eyes popped a little at the price of refueling a massive EV.
This isn’t a one-to-one comparison, of course: the R1S also goes farther on a charge because of how much energy its huge battery can store, so it’s a bit like comparing a compact car to a Ford F-150 and its 36-gallon gas tank — you’re spending much, much, more, but you’re going a little farther, too. Still, it is a reminder that size matters, whether you’re talking about gas or electric. Under a Trump administration where electricity prices are forecasted to spike, EV shoppers might find themselves thinking the way Americans often have during oil crises and gas price hikes: taking a long look at smaller and lighter vehicles to save money.
The EV weight problem is well-known. To summarize: EVs tend to be weighty because of their massive battery packs. Making electrified versions of the big trucks and SUVs Americans love amplifies the problem. You need very big batteries to store enough energy to give them a decent range, and adding a large lithium-ion unit along the bottom adds even more girth.
Weighty EVs have raised concerns over public safety, since they could be more dangerous to pedestrians, cyclists, and other cars during collisions. Their bulk leads to prematurely worn-out tires, which potentially creates more tire dust and forces drivers to replace their rubber sooner. Bigger batteries need larger amounts of rare metals to make them. And now, in a world of expensive electricity, a heavy EV could hammer a driver’s wallet.
Those of us raised on miles per gallon must learn a new statistical vocabulary to think about the efficiency of EVs. The simplest stat is the number of miles traveled per kilowatt-hour of energy. Lucid, the luxury EV-only startup, has been gunning for the efficiency title with its streamlined Air sedan and has bragged about making 5 miles per kilowatt-hour. By comparison, the current Tesla Model 3 makes around 4 miles per kilowatt-hour, while a big, heavy Rivian gets somewhere in the 2s. (Using a conversion formula from the Environmental Protection Agency to calculate the energy present in a gallon of gas shows that a relatively efficient sedan like the Honda Civic scores around 1, by Lucid’s math, and a big pickup truck even worse.)
These numbers are context-dependent, of course. Just as a gas car or hybrid is judged by its city, highway, and combined mileage, an electric car goes much farther at slow speeds than it does on the highway. A big three-row Hyundai Ioniq 9 EV that can deliver 3 miles or more per kilowatt-hour at slower speeds made right around 2.0 when I sped down Interstate 5, the AC blasting to keep the baby comfortable on a hot California day. The Supercharger bill was enough to make me miss my little Tesla.
The dollars-and-cents calculation is a little different with all-electric vehicles than it was in the all-gasoline era. Drive a gas car and you pay whatever the gas station charges; there is little recourse beyond knowing which service station in your city is the cheapest. With EVs, however, most drivers do their charging primarily at home, where the cost per kilowatt-hour for residential energy is much lower than the inflated cost to refill the battery at a public fast-charger. (Even California’s high cost for home electricity amounts to just half of what some EV fast-chargers cost during afternoon and evening times of peak demand.) But there’s no way to beat the system entirely. Drive a giant, electron-guzzling EV and you’ll be much more vulnerable to a spike in electricity prices.
And it’s not just the cost of recharging a battery — size also matters a lot for the up-front cost of the EV. Americans have become accustomed to paying a premium for larger vehicles, but for combustion cars, this is simply a market phenomenon. It doesn’t cost that much more to build a crossover instead of a sedan, or to give a vehicle a bigger gas tank. The car companies know you’ll pay thousands more for a Toyota RAV4 than for a Corolla. With electric vehicles, however, you’re paying for size in a much more direct fashion. That huge battery needed to move a Rivian is simply much more expensive to build than the one in a Chevy Bolt.
Carmakers are now confronting this problem as they try to crack the affordable EV problem. A subtle detail in Ford’s big announcement last week that it would build a $30,000 mid-size electric pickup is that the vehicle would have a battery perhaps half as big as the one in the F-150 Lightning EV and four times smaller than the biggest one you can get with Chevy’s Silverado EV.
Building a truck with a relatively small battery will undoubtedly slash costs compared to the monster units we’ve seen in full-size electric pickups. It also means that Ford will have to be especially conscious of the vehicle’s weight to maximize the range that can be squeezed out of those few kilowatt-hours. Until battery production costs tumble, that is the way to the more-affordable EV — do more with less.
On COP30 jitters, a coal mega-merger gone bust, and NYC airport workers get heated
Current conditions: Hurricane Erin is lashing Virginia Beach with winds up to 80 miles per hour, the Mid-Atlantic with light rain, and New York City with deadly riptides • Europe’s wildfires have now burned more land than any blazes in two decades • Catastrophic floods have killed more than 300 in Pakistan and at least 50 in Indian-administered Kashmir.
Offshore oil rigs in California. Mario Tama/Getty Images
Two weeks after de-designating millions of acres of federal waters to offshore wind development, the Trump administration Tuesday set a new schedule for auctions of oil-and-gas leases in the Gulf of Mexico and Alaska’s Cook Inlet, stretching all the way out to 2040. In a press release, Secretary of the Interior Doug Burgum cited the recently passed One Big Beautiful Bill Act as a “landmark step toward unleashing America’s energy potential” by “putting in place a bold, long-term program that strengthens American Energy Dominance, creates good-paying jobs and ensure we continue to responsibly develop our offshore resources.”
The lease plan may violate federal law, however, as the administration has not conducted environmental analyses or held public hearings before putting the auctions on the calendar. “There’s no world in which we will allow the Trump Administration to hold dozens of oil sales in public waters, putting Americans, wildlife, and the planet in harm’s way, without abiding by the law,” Brettny Hardy, an oceans attorney at the environmental group Earthjustice, said in a statement. “Even with its passage of the worst environmental bill in U.S. history, the Republican-led Congress did not exempt these offshore oil sales from needing to comply with our nation’s environmental statutes.”
In an open letter published Tuesday, André Corrêa do Lago, the veteran Brazilian diplomat leading the next United Nations climate summit, warned that “geopolitical and economic obstacles are raising new challenges to international cooperation — including under the climate regime.” The letter comes after UN-sponsored talks over a plastics treaty collapsed last week, with the U.S. joining fellow oil producers Russia, Saudi Arabia, and Iran in standing athwart more than 100 other countries that supported a deal to curb production of new disposable plastics.
The climate summit, known as COP30, is set to take place in the Brazilian Amazon city of Belém in November. It will be the first global climate confab since President Donald Trump returned to office and, on his first day back in the White House, kicked off the process to withdraw the U.S. from the 2015 Paris climate deal.
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Peabody Energy backed out of its $3.8 billion agreement to buy Anglo American’s coal mines following the unexpected closure of the deal’s flagship mine. On Tuesday, the largest U.S. coal producer said that an explosion last March at Anglo America’s Moranbah North mine in Australia resulted in a “material adverse change” to its deal. The move dealt a major blow to London-based Anglo American, which had planned to use the sale as part of a broader restructuring to fend off a hostile takeover attempt by rival BHP. Anglo American CEO Duncan Wanblad said he was “very disappointed,” according to the Financial Times, and the company said it would “seek damages for the wrongful termination.”
The deal comes amid a global comeback for the main fuel blamed for climate change. As my colleague Matthew Zeitlin wrote last month, “the evidence for coal’s stubborn persistence globally has been mounting for years. In 2021, the International Energy Agency forecast that by 2024, annual coal demand would hit an all-time high of just over 8,000 megatons. In 2024, it reported that coal demand in 2023 was already at 8,690 megatons, a new record; it also pushed out its prediction for a demand plateau to 2027, at which point it predicted annual demand would be 8,870 megatons.”
The California startup ChemFinity got a big boost on Tuesday, raising $7 million in a funding round led by At One Ventures and Overton Ventures. The company, spun out from the University of California, Berkeley, claims its critical mineral recovery system will be three times cheaper, 99% cleaner and 10 times faster than existing approaches currently found in the mining and recycling industries. “We basically act like a black box where recyclers or scrap yards or even other refiners can send their feedstock to us,” Adam Uliana, ChemFinity’s co-founder and CEO, told Heatmap’s Katie Brigham. “We act like a black box that spits out pure metal.”
At a time when record heat is regularly halting flights on sweltering tarmacs, service workers at New York City’s LaGuardia and John F. Kennedy airports are slated to protest on Wednesday to demand new workplace protections from extreme heat. The workers, many of whom handle cargo and ramp services for major airlines, said in a press release that extreme heat and lack of access to water, rest breaks, and proper training threatened more incidents of heat illness. One worker claimed to have recently lost consciousness inside the cargo hold of a plane due to heat. The members of chapter 32BJ of the Service Employees International Union will be joined by State Assemblymembers Steven Raga and Catalina Cruz in their demonstration, which is scheduled to begin at 10 a.m. near LaGuardia’s Old Marine Terminal.
I swear by the shvitz. My great grandfather, after whom I’m named, went to the same Russian bathhouse in Manhattan that my cousin, brother, and I visit regularly to enjoy the sauna and cold plunge. Turns out amphibians feel the same. A researcher at Macquarie University in Sydney found that frogs could fight off the deadly chytrid fungal infection plaguing the green and golden bell frog by sitting in “frog saunas.” Spending a few hours a day in warm enclosures that reach temperatures higher than 83 degrees Fahrenheit for a week or less is all that’s needed to kill off the fungus.