PUCT Cleared Oncor's 400-Mile 765 kV Permian Basin Line on August 28, and ERCOT Warns West Texas Rolling Blackouts Could Start in 2027

On August 28, 2026, the Public Utility Commission of Texas voted 5 to 0 to approve Oncor's first two 765 kV Permian Basin transmission projects, roughly 424 miles of new extra high voltage line at a combined cost near $3.95 billion, with completion staged for 2028 and 2029. For Texas commercial electricity buyers, the vote sets the clock on a build-out that ERCOT's own senior leadership has said is now the only backstop against controlled outages in the Permian by summer 2027, and the recovery of that spend runs through transmission and delivery charges every Texas commercial account already pays.

What Happened

The commission approved amendments to Oncor's Certificates of Convenience and Necessity for two segments of the Permian Basin Reliability Plan: Dinosaur Switch to Longshore Switch, and Longshore Switch to Drill Hole Switch. Together they build the first individual 765 kV lines the state has ever authorized, out of a broader plan the PUCT adopted in April 2025 after Section 39.167 of the Texas Utilities Code required ERCOT to design one. Oncor expects the Dinosaur to Longshore segment to enter service in 2028 and the Longshore to Drill Hole segment in 2029.

The engineering choice matters because the alternative was a much larger network of lower voltage 345 kV lines. According to S&P Global (2025), ERCOT manager of system dynamic studies Sun Wook Kang said the 765 kV option was "a lot better" for moving power from the Far West into major load centers and "better" at accommodating future load and generation. According to Utility Dive (2025), Oncor SVP and COO Ellen Buck framed the buildout as providing "the safe and reliable flow of electricity throughout Texas at a time when we're seeing unprecedented, dynamic growth." The reliability urgency comes from ERCOT itself: ERCOT COO Woody Rickerson testified in July 2026 that rolling blackouts are possible in the Permian Basin by summer 2027 if the new transmission does not arrive on time. See the commission docket at puc.texas.gov and ERCOT's public materials at ercot.com.

The load side of the case is not subtle. Utility Dive, citing ERCOT data in Oncor's application, put projected Permian demand at 11,132 MW in 2026, 23,659 MW in 2030, and 26,400 MW by 2038. Oncor's own commercial and industrial queue tells the same story: Oncor executive Geoffrey Bailey said on CIBC's podcast that the large C&I interconnection queue reached roughly 298 GW against a 33 GW peak transmission system at the end of the second quarter of 2026. West Texas is where that arithmetic breaks the grid first.

Impact on Commercial Electricity Buyers in Texas

The approval is not a change to your energy rate, it is a change to your delivery rate over the next decade. Retail energy prices are competitive in ERCOT, but the transmission and delivery utility charges that sit on every commercial bill are set by the PUCT and pass through to your account regardless of the retail provider you pick. Here is how a $3.95 billion project reaches your invoice, in three channels.

TDU delivery charges will step up. Transmission Cost of Service rates are recovered through the transmission and distribution utility charges that already make up a meaningful share of a Texas commercial bill. Once the 765 kV lines enter service in 2028 and 2029, the depreciation and return on that $3.95 billion of new plant flow into the TCOS surcharge and the delivery lines on your invoice, statewide.

The Far West spread stays wide until steel is in the ground. A February 2025 analysis by the Yale Clean Energy Forum put congestion rent in the Far West region at roughly $350 million, and referenced ERCOT congestion that cost Texas customers about $10 billion between 2020 and 2024. Congestion is the market's price signal for scarce transmission, and it runs highest where the wires are the tightest, which is exactly where a commercial account served through AEP North or TNMP sits today.

Contract term becomes a transmission hedge. In the commercial plans we track across all five TDU territories today (8,448 active plans across 29 REPs), the spread between short and long term fixed offers already reflects transmission risk. A 24 to 48 month lock signed now sets the energy component before three years of new TCOS surcharges land, but a shorter term keeps the option open in case ERCOT peaks and interim projects reshape the forward curve.

The Permian Import Cost Test: Three Questions Before You Sign

Before you accept any Texas commercial offer whose term overlaps the 2028 to 2029 in-service dates, run it through the three questions we use to size the transmission cost exposure baked into the price, so a competitive energy rate does not hide a delivery bill that is quietly stepping up.

1. Does the quoted rate lock the delivery side, the energy side, or both?

Most Texas commercial offers lock only the energy component. Ask the provider whether the quoted price per kWh is a pure energy rate or an all-in figure. TCOS and TDU delivery charges typically pass through to your bill even under a fixed contract, and that pass-through is where the Permian build-out lands.

2. Is the term long enough to sit above the 2028 to 2029 in-service window?

The Dinosaur to Longshore segment is scheduled to energize in 2028 and Longshore to Drill Hole in 2029. A 12 to 18 month term signed today expires before the recovery starts to hit rates, which sounds attractive but also puts you back in the market during the years TCOS surcharges are stepping up. A 36 to 48 month term smooths the transition.

3. What does the delivery side of a comparable AEP North or TNMP quote add to your rate?

Commercial accounts on AEP North and TNMP feel the West Texas transmission arithmetic first because their delivery charges are set for the territories that carry the load growth. Ask for a plan comparison that separates the energy rate, the TCOS component, and the TDU delivery charges, not a single blended cents per kWh figure.

What You Should Do

Turn the August 28 approval into three moves you can make this week, whether your contract renews soon or you are still watching the market from the sidelines.

Pull your current Electricity Facts Label and note your term end date, your average price per kWh, and the delivery charge lines on your most recent invoice.
Compare current published commercial offers for your TDU territory against what you pay today, paying attention to both the energy rate and the all-in delivery figure.
If your term ends between now and the end of 2028, request 24 to 48 month quotes that span the Dinosaur to Longshore in-service date so the energy side is set before TCOS recovery starts landing on bills.

Questions to Ask Your REP or Broker

When you call a provider this week, these questions separate an offer that has priced in the Permian recovery from one that has not, and they give you a clean way to compare quotes on the same terms.

Is the quoted rate energy only, or does it bundle a TDU pass-through estimate, and how do you handle a mid-term TCOS increase?
What is your 12, 24, 36, and 48 month offer for my meter today, and what is the spread between the shortest and longest terms?
Does the contract have a change in law or regulatory pass-through clause that could adjust the rate if the PUCT approves additional Permian 765 kV segments?
What is the early termination fee if I sign now and forward prices fall after ERCOT's next seasonal assessment?

For the full picture, see our Texas commercial electricity rates overview, and subscribe to Weekly Market Insights, free. We publish a data-driven rate report every Monday.

Frequently Asked Questions

What did the PUCT approve on August 28, 2026?

On August 28, 2026, the Public Utility Commission of Texas voted 5 to 0 to approve amendments to Oncor's Certificates of Convenience and Necessity for two 765 kV segments of the Permian Basin Reliability Plan, Dinosaur Switch to Longshore Switch and Longshore Switch to Drill Hole Switch, totaling roughly 424 miles of new extra high voltage line at a combined cost near $3.95 billion.

When will the new 765 kV Permian Basin transmission lines start operating?

Oncor expects the Dinosaur to Longshore segment to enter service in 2028 and the Longshore to Drill Hole segment in 2029. Both are the first individual 765 kV lines Texas has ever authorized, out of a broader Permian Basin Reliability Plan the PUCT adopted in April 2025.

How does the Permian transmission build-out affect Texas commercial electricity bills?

The $3.95 billion of new plant will be recovered through Transmission Cost of Service rates that flow into the TDU delivery charges on every Texas commercial bill, statewide, starting when the lines enter service in 2028 and 2029. Retail energy rates are set separately by REPs and are competitive, but TCOS and TDU delivery charges pass through to your account regardless of the provider you pick.

Which Texas commercial buyers feel the Permian transmission impact first?

Commercial accounts served by AEP North and TNMP feel the West Texas transmission arithmetic first because their delivery charges are set for the territories carrying the load growth. Yale Clean Energy Forum reported roughly $350 million in Far West congestion rent, and ERCOT congestion cost Texas customers about $10 billion between 2020 and 2024.