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$360M DOE grant to fund project that will connect ERCOT to US power grid

For the first time, Texas's ERCOT grid will be connected to other states' grids thanks to funding from the Department of Energy. Photo via Getty Images

Thanks to recently announced funding, the power grid for the territory served by the Electric Reliability Council of Texas (ERCOT) will be connected to grids in other states.

Officials hope building a 320-mile transmission line that connects the ERCOT electric grid to electric grids in the Southeast will prevent power outages like the massive blackout that occurred in 2022 when a winter storm blasted Texas.

San Francisco-based Pattern Energy says its Southern Spirit project will cost more than $2.6 billion. Full-scale construction is supposed to get underway in 2028, and the project is set to go online in 2031.

The U.S. Department of Energy recently approved up to $360 million for the transmission project. The transmission line will stretch from Texas’ border with Louisiana to Mississippi. It’ll supply about 3,000 megawatts of electricity in either direction. That’s enough power for about 750,000 residential customers during ERCOT’s peak hours.

ERCOT’s more than 54,100 miles of transmission lines supply power to about 90 percent of Texans.

“The U.S. transmission network is the backbone of our nation’s electricity system. Though our grid has served U.S. energy needs for more than a century, our country’s needs are changing,” David Turk, under secretary at the Department of Energy, says in a news release.

“DOE’s approach to deploying near-term solutions and developing long-term planning tools will ensure our electric grid is more interconnected and resilient than ever before,” Turk adds, “while also supporting greater electricity demand.”

The other three projects that recently received funding from the DOE include:

  • Aroostook Renewable Project, which will construct a new substation in Haynesville, Maine, and a 111-mile transmission line connecting to a substation in Pittsfield, Maine.
  • Cimarron Link, a 400-mile HVDC transmission line from Texas County, Oklahoma to Tulsa, Oklahoma
  • Southline, which will construct a 108-mile transmission line between Hidalgo County, New Mexico, and Las Cruces, New Mexico. The DOE previously supported a 175-mile line from Hidalgo County, New Mexico, to Pima County, Arizona, in Southline Phase 1 on the first round of the Transmission Facilitation Program.

This month's funding completes the $2.5 billion in awards from the Transmission Facilitation Program which is administered through the Building a Better Grid Initiative that launched in January 2022. Its mission has been to develop nationally significant transmission lines, increase resilience by connecting regions of the country and improve access to clean energy sources, according to the DOE.

Earlier this year, ERCOT, which manages 90 percent of Texas’ power supply, forecasted a major spike in demand for electricity over the next five to seven years

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A View From HETI

A 146-year-old Houston company is the first to land an investment from the Blackstone Energy Transition Partners V fund. Photo via dresserutility.com

Asset manager Blackstone has agreed to buy Houston-based Dresser Utility Solutions from Connecticut private equity firm First Reserve for an undisclosed amount. First Reserve has a major presence in Houston.

The deal represents the first investment from Blackstone Energy Transition Partners V.

“Blackstone’s deep resources and experience in the utility sector make them an ideal partner as we continue to invest in innovation, expand our product portfolio, and deliver value for our customers,” Dresser CEO David Evans said in a news release.

Founded in 1880, Dresser provides metering technology, digital instrumentation and software, pressure and flow controls, and infrastructure repair products for gas and water utilities and industrial customers. The company employs about 850 people worldwide.

“As demands on the energy grid continue to grow, Dresser plays a critical role as a trusted partner to utilities managing essential infrastructure. The company’s products are foundational to the safe and reliable operation of gas and water networks, and its reputation for quality has helped build longstanding customer relationships,” David Foley, global head of Blackstone Energy Transition Partners, and JP Munfa, senior managing director, said in the release.

Blackstone Energy Transition Partners has invested more than $28 billion across the energy transition sector. New York-based Blackstone closed Blackstone Energy Transition Partners Fund IV at $5.6 billion in February 2025. Blackstone Energy Transition Partners Fund III closed in 2020 for $4.4 million, according to Pitchbook.

Other notable energy transition investments from Blackstone funds include Salt Lake City-based Energy Exemplar, French electronics manufacturing company Sediver, Plano-based Westwood Professional Services and others.

Two years ago, Dresser secured a $335 million credit facility from funds managed by asset manager Blue Owl Capital. At the time, Dresser said the money would go toward capital expenses, acquisitions and corporate needs.

This is the second notable investment Blackstone has made in a Houston-based energy company in recent months. In May, Blackstone and energy heavyweight Halliburton made a $1 billion equity investment in Houston power generation startup VoltaGrid, which provides behind-the-meter mobile power generation equipment for data centers, microgrids and industrial customers.

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