The Department of Energy selected Pattern Energy’s Southern Spirit Transmission project under its Transmission Facilitation Program in October 2024, awarding up to $360 million in capacity contract support. The project is a 320-mile, 525 kV HVDC line capable of carrying 3,000 MW bidirectionally between Rusk County, Texas (inside ERCOT) and Choctaw County, Mississippi (inside the Eastern Interconnection). Total project cost exceeds $2.6 billion. Louisiana’s Public Service Commission certified the project in 2024; construction is slated for 2026 with service beginning late 2029.
ERCOT has operated as an isolated grid since the 1960s, a choice that gave Texas regulatory independence from FERC at the cost of minimal ability to import or export power during regional stress events. The February 2021 winter storm, which caused 246 deaths and approximately $200 billion in economic damage, put the isolation question back on the table. Southern Spirit would provide ERCOT its first substantial bidirectional tie to the eastern grid, with 3,000 MW of capacity roughly equivalent to three large gas turbine plants.
The DOE Transmission Facilitation Program, created under the Infrastructure Investment and Jobs Act, acts as an anchor capacity customer to make large-scale transmission projects financeable. The $360 million capacity contract provides Pattern Energy with a revenue floor that de-risks the equity investment without requiring the project to wait for a traditional regulated-utility cost recovery structure. Southern Spirit is one of the cleaner examples of the TFP working as designed: a market-driven project with a clear need, an identified developer, and a capital structure that works if the government provides the anchor.