AC transmission: Unit economics
What a mile of high-voltage line really costs
What this tab covers What it costs to move a unit of energy this way: capital and operating costs, tariffs, utilisation and how it compares with the alternatives.A new high-voltage AC line costs roughly USD 4 to 6 million per mile in the US. Spread over decades of use, the cost of moving a MWh is modest compared with generating it, but equipment prices are rising.
Key costs
| Measure | Value | Note |
|---|---|---|
| New 345 kV double-circuit line, Texas | About 4.2 USD million per mile6 | ERCOT planning estimate, 2025; about USD 2.6 million per km (calculated) |
| New 765 kV single-circuit line, MISO cost guide | 5.2 to 6.3 USD million per mile15 | MISO 2024 Transmission Cost Estimation Guide, as cited by AEP to the Texas PUC; AEP's own recent 765 kV line cost about 3.75 |
| Texas 765 kV plan versus 345 kV plan | About 33.0 versus 30.8 USD billion6 | Whole-plan estimates including substations, January 2025; about 7% more for 765 kV (calculated) |
| MISO 765 kV Iowa line (EASL) | About 1.23 USD billion8 | 187 miles of 765 kV plus 22 miles of 345 kV and a new substation; about USD 5.9 million per mile all-in (calculated) |
| Cost to move 1 MWh 1,000 km, 765 kV single circuit | About 21 to 26 USD/MWh515 | Calculated: line cost from the MISO guide only, 8% over 40 years, 2,435 MW at 60% utilisation; excludes substations, losses and operation |
| Cable and transformer prices | Cables nearly doubled since 2019; transformers up about 75% real terms3 | IEA, 2025 |
| Lead time, large power transformers | Up to 4 years23 | Average lead times almost doubled since 2021 |
Where the money goes
| Item | Share or amount |
|---|---|
| Line (AEP Greentown to Reynolds 765 kV, about 64 miles) | About USD 240 million, about 69% (calculated)15 |
| Substations (same project) | About USD 107 million, about 31% (calculated)15 |
Utilisation matters as much as build cost: a line run at 60% of its rating spreads its fixed cost over twice as many MWh as one run at 30%. Losses add a running cost, which is why higher voltages often pay back on busy corridors.
AC lines are cheapest for short and medium distances; HVDC wins on long routes and under the sea. Spending must rise: the IEA says transmission investment needs to exceed USD 200 billion a year by the mid-2030s, up from USD 140 billion in 2023.
Sources
- Building the Future Transmission Grid: Executive summary IEA, 2025
- Rising component prices and supply chain pressures are hindering the development of transmission grid infrastructure IEA, 2025
- Discussion of EHV and HVDC (M. Tackett, MISO, presentation to ERCOT) MISO / ERCOT, 2023
- 2024 Regional Transmission Plan: 345 kV Plan and Texas 765 kV Strategic Transmission Expansion Plan ERCOT, 2025
- MISO selects Ameren, GridLiance and Dairyland consortium for EASL 765 kV project (reporting MISO's cost estimate) American Public Power Association, 2026
- AEP Companies' comments about extra high voltage transmission lines to the ERCOT region (Project 55249, citing MISO 2024 Transmission Cost Estimation Guide) Public Utility Commission of Texas, 2024