Transmission congestion cost the US grid $12B in 2024, and Texas's data center freeze is making the bottleneck worse

Transmission congestion added $12 billion in wholesale power costs to the US grid in 2024, and a new regulatory freeze in Texas is threatening to compound the strain. The combination of a newly published federal capacity study and a state-level moratorium on data center interconnections is forcing energy procurement and operations teams to re-examine assumptions about where power can reliably flow and when new load can come online.

DOE puts a $12B price tag on grid bottlenecks

The U.S. Department of Energy released a draft National Transmission Needs Study on July 9, 2026, finding that total US congestion costs climbed to $12 billion in 2024 from $11 billion in 2023, according to reporting by Utility Dive senior reporter Ethan Howland. The figure is down sharply from $21 billion in 2022, a year distorted by high natural gas prices and severe weather, but the upward move from 2023 to 2024 signals that the relief was temporary.

The DOE's draft study identifies interregional transmission and stronger links between grid operators as the highest-potential tools for relieving congestion and improving resource adequacy. That conclusion matters operationally: it points procurement and infrastructure planning teams toward interregional projects as the investments most likely to reduce locational marginal price spikes and firm up supply agreements that depend on cross-region power flows.

The Electric Reliability Council of Texas installed the most transmission lines of any US grid operator between 2016 and 2024, according to the DOE's draft study, making the state's current policy reversal all the more consequential for the national picture.

Texas freezes the queue on 474 GW of data center demand

Texas Governor Greg Abbott has called for a full audit of all data center projects in ERCOT's interconnection queue, according to Utility Dive. In response, ERCOT delayed its Batch Zero review process, which was the immediate pathway for new large-load interconnection approvals in the state. The queue at the time of the freeze held an estimated 474 GW of interconnection requests, a figure that illustrates the scale of hyperscale and colocation demand concentrated in Texas.

The policy was driven partly by growing public opposition to the pace of data center development and a desire, expressed by state officials, for more durable long-term outcomes on grid reliability. For operators who had planned Texas capacity around expected interconnection timelines, the moratorium introduces a material planning variable that was not priced into most 2025-era site selection or power purchase decisions.

One in five US data center projects now faces delay risk

Bloomberg NEF analysts warned that the Texas moratorium puts roughly 20% of the entire US data center development pipeline at risk of delay, according to Utility Dive. The risk grows with duration: the longer the freeze stays in place, the more projects miss construction windows, lose financing commitments, or shift planning to other states. For colocation buyers and hyperscale operators evaluating 2027 and 2028 capacity, that is a meaningful compression of available supply in the state.

Oncor, the largest transmission utility in Texas by customer count, had nearly 300 GW of load interconnection requests in its active pipeline at the time of the freeze. Executives at parent company Sempra told investors they support the governor's pause, citing the same long-term reliability rationale offered by state officials, according to Utility Dive. That position leaves the disposition of Oncor's load pipeline uncertain until the audit concludes and ERCOT resumes its Batch Zero process.

What this means for your team

• Audit your Texas power and capacity positions: any data center, colocation, or large industrial load project that had assumed a 2026 or 2027 ERCOT interconnection date should be re-evaluated against the suspended Batch Zero timeline.
• Factor congestion costs into procurement modeling: the DOE's $12 billion 2024 figure confirms that locational marginal price premiums from congestion are a recurring line item, not a one-time event; interregional transmission access should be a scoring criterion in RFP evaluations.
• Assess geographic diversification of critical load: Bloomberg NEF's 20% pipeline-at-risk estimate gives quantitative weight to the argument for distributing data center and large-load capacity across multiple grid regions rather than concentrating in a single state.
• Watch the ERCOT audit timeline: Sempra and Oncor executives' public support for the pause suggests the freeze may persist longer than a brief regulatory correction; procurement teams should set a trigger date for activating contingency site options if the moratorium extends beyond Q4 2026.