# AC transmission: Unit economics

What a mile of high-voltage line really costs

Source page: https://www.materialinsights.org/energy/e_hvac/economics/

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 mile^[6](https://www.ercot.com/files/docs/2025/01/27/2024-regional-transmission-plan-rtp-345-kv-plan-and-texas-765-kv-strategic-transmission-expans.pdf) | 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 mile^[15](https://interchange.puc.texas.gov/Documents/55249_7_1414447.PDF) | 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 billion^[6](https://www.ercot.com/files/docs/2025/01/27/2024-regional-transmission-plan-rtp-345-kv-plan-and-texas-765-kv-strategic-transmission-expans.pdf) | Whole-plan estimates including substations, January 2025; about 7% more for 765 kV (calculated) |
| **MISO 765 kV Iowa line (EASL)** | About 1.23 USD billion^[8](https://www.publicpower.org/node/31550) | 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/MWh^[5](https://www.ercot.com/files/docs/2023/06/27/2_ERCOT%20Discussion%20of%20EHV%20and%20HVDC_MISO_Tackett_20230626.pdf)^[15](https://interchange.puc.texas.gov/Documents/55249_7_1414447.PDF) | 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 terms^[3](https://www.iea.org/news/rising-component-prices-and-supply-chain-pressures-are-hindering-the-development-of-transmission-grid-infrastructure) | IEA, 2025 |
| **Lead time, large power transformers** | Up to 4 years^[2](https://www.iea.org/reports/building-the-future-transmission-grid/executive-summary)^[3](https://www.iea.org/news/rising-component-prices-and-supply-chain-pressures-are-hindering-the-development-of-transmission-grid-infrastructure) | 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](https://interchange.puc.texas.gov/Documents/55249_7_1414447.PDF) |
| **Substations (same project)** | About USD 107 million, about 31% (calculated)^[15](https://interchange.puc.texas.gov/Documents/55249_7_1414447.PDF) |

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

1. [Building the Future Transmission Grid: Executive summary](https://www.iea.org/reports/building-the-future-transmission-grid/executive-summary) IEA, 2025
2. [Rising component prices and supply chain pressures are hindering the development of transmission grid infrastructure](https://www.iea.org/news/rising-component-prices-and-supply-chain-pressures-are-hindering-the-development-of-transmission-grid-infrastructure) IEA, 2025
3. [Discussion of EHV and HVDC (M. Tackett, MISO, presentation to ERCOT)](https://www.ercot.com/files/docs/2023/06/27/2_ERCOT%20Discussion%20of%20EHV%20and%20HVDC_MISO_Tackett_20230626.pdf) MISO / ERCOT, 2023
4. [2024 Regional Transmission Plan: 345 kV Plan and Texas 765 kV Strategic Transmission Expansion Plan](https://www.ercot.com/files/docs/2025/01/27/2024-regional-transmission-plan-rtp-345-kv-plan-and-texas-765-kv-strategic-transmission-expans.pdf) ERCOT, 2025
5. [MISO selects Ameren, GridLiance and Dairyland consortium for EASL 765 kV project (reporting MISO's cost estimate)](https://www.publicpower.org/node/31550) American Public Power Association, 2026
6. [AEP Companies' comments about extra high voltage transmission lines to the ERCOT region (Project 55249, citing MISO 2024 Transmission Cost Estimation Guide)](https://interchange.puc.texas.gov/Documents/55249_7_1414447.PDF) Public Utility Commission of Texas, 2024

## Other sections

- [Summary](https://www.materialinsights.org/energy/e_hvac/index.md)
- [Overview](https://www.materialinsights.org/energy/e_hvac/overview/index.md)
- [Correlation](https://www.materialinsights.org/energy/e_hvac/correlation/index.md)
- [How it works](https://www.materialinsights.org/energy/e_hvac/explain/index.md)
- [Efficiency and losses](https://www.materialinsights.org/energy/e_hvac/efficiency/index.md)
- [Technology advances](https://www.materialinsights.org/energy/e_hvac/advances/index.md)
- [Value chain](https://www.materialinsights.org/energy/e_hvac/valuechain/index.md)
- [Geopolitics and regulation](https://www.materialinsights.org/energy/e_hvac/geopolitics/index.md)
- [Impact on the biosphere](https://www.materialinsights.org/energy/e_hvac/biosphere/index.md)
- [Relationships](https://www.materialinsights.org/energy/e_hvac/links/index.md)