DOE Commits $1.9 Billion to Grid Upgrades as Eight States Sue Over Offshore Wind Lease Buyouts

The U.S. Department of Energy said Thursday it will fund 31 grid-improvement projects across 26 states with $1.9 billion in federal money, part of a $5.25 billion total effort that includes $3.35 billion from project sponsors, according to the department's own announcement.

The projects fall under DOE's Speed to Power through Accelerated Reconductoring and other Key Advanced Transmission Technology Upgrades program, or SPARK. DOE says recipients will reconductor or rebuild more than 1,500 miles of transmission lines and add grid-enhancing technologies across nearly 21,000 miles, unlocking more than 23 gigawatts of capacity. That's enough to power 16 million homes, according to Spotlight PA and Ground News reporting on the announcement.

Energy Secretary Chris Wright promoted the program Thursday at a PPL Corp. facility in Allentown, Pennsylvania, according to Spotlight PA. PPL says two data centers in its territory came online this year with six more under construction. AI's power appetite is outrunning the grid's ability to deliver it.

"These investments will get more out of the infrastructure we already have, move more electricity across the grid, and help deliver affordable, reliable and secure power," Wright said in DOE's release. Assistant Secretary Catherine Jereza said the goal is unlocking capacity "without" the multi-decade timelines of building new transmission corridors.

The money itself traces back to the Infrastructure Investment and Jobs Act, the bipartisan 2021 law signed under President Joe Biden, according to Utility Dive. The Trump administration is spending it under Trump's "Unleashing American Energy" executive order. This particular pot of federal cash has survived a change in administration intact.

Biggest single projects include a $1.2 billion Colorado Energy Office effort to link the Eastern and Western power grids through Colorado, Texas and neighboring states, and an $832 million Oklahoma project called "Three Corners Connection" tying the Southwest Power Pool to the Western grid, per DOE's project summary. Recipients include Alabama Power, Duke Energy Carolinas, Eversource Energy, PPL Electric, the Tennessee Valley Authority, the New York Power Authority and the Orlando Utilities Commission, according to the American Public Power Association.

One right-leaning outlet cited in industry roundups described this as the Energy Department "spending $5 billion on grids." That conflates the full project cost, most of which is private and utility cost-share, with the federal government's actual $1.9 billion outlay. The distinction matters for anyone tracking taxpayer exposure versus private investment.

Spotlight PA also flagged a real tension: utilities have seen rising profits during the data-center boom, and critics quoted in that reporting say utilities tend to favor building expensive new plants and lines, which earn a regulated rate of return, over cheaper efficiency upgrades like the ones DOE is funding. That's a claim from utility critics, not an established DOE finding, but it's a fair question for ratepayers watching bills rise faster than inflation.

The Wind Fight

While DOE touted grid upgrades, a separate and more contentious energy fight landed in court. New York Attorney General Letitia James and Governor Kathy Hochul announced lawsuits Tuesday challenging Interior Department agreements with Bluepoint Wind and Invenergy, joined by attorneys general from Connecticut, Delaware, Maine, Massachusetts, New Jersey, Rhode Island and Vermont, according to the Epoch Times. California filed a separate suit Sept. 22 over a related piece of the Invenergy deal.

Under an April agreement, a Bluepoint affiliate agreed to invest up to $765 million in a U.S. LNG facility in exchange for Interior canceling its offshore wind lease and reimbursing the company an equivalent amount. Bluepoint also agreed to stay out of future U.S. offshore wind development. A June deal with Invenergy covered four leases worth a combined $765 million, redirecting the money toward Midwest gas plants and Western geothermal projects.

Three of the Invenergy leases, worth about $653 million off the Northeast coast, are the subject of the eight-state lawsuit. The fourth, worth more than $111 million off California's Central Coast, is what California is suing over separately.

Both suits target the same mechanism: the Judgment Fund, a pool of money Congress set up to pay court judgments and settlements against the federal government, which has no spending cap. The states argue the Interior Department created settlement-style agreements without any actual lawsuit to settle, and used that structure to funnel taxpayer money into canceling wind projects that could have powered the Northeast and supported what the states describe as thousands of jobs. California makes a parallel argument, saying the fund cannot legally be tapped absent an existing or imminent legal dispute.

The Interior Department did not respond to the Epoch Times' request for comment on the lawsuits. The department has previously defended the buyouts as redirecting investment toward energy sources it considers more reliable and affordable than offshore wind. In August, Interior separately paid $1.22 billion to a German energy company as part of a similar arrangement.

The states' argument that federal officials manufactured a legal dispute to unlock the fund is a serious claim about executive overreach, but it remains contested by an administration that says it's simply steering energy investment toward what it sees as more dependable power sources, including the gas buildout underway in places like Fayette County, Pennsylvania, where NextEra Energy Resources is developing a $17 billion, 4.3-gigawatt gas plant financed in part through the U.S.-Japan trade agreement.

Court dates for the California and Northeastern-state lawsuits have not yet been set, according to the Epoch Times.