The cancellation of a $4.9 billion federal loan for the so-called “Grain Belt Express” does not appear to have halted the project entirely.
The Grain Belt Express is an approximately 800-mile high-voltage direct current transmission line that would take wind power generated in Southwest Kansas to Missouri and Illinois, ending at the Indiana border.
Jim Zakoura, an attorney who specializes in power issues, said the company behind the Grain Belt Express — Invenergy — appears to be moving forward with the approximately $12 billion project utilizing private financing.
“What I’m hearing is that the company … continues to go forward with private financing in lieu of federal financing, and they would appear to have the financial wherewithal to do that if they feel that that’s the appropriate place to deploy their capital,” Zakoura said.
He noted this is a huge project.
“It’s a very big project, multi-billion dollars for sure, because of that price tag, at some point, they had requested the federal loan guarantees,” Zakoura said. “Which are generally available for projects that have national importance, national significance, and they were awarded that designation last, I believe it was November, and received a conditional loan guarantee of $4.9 billion, and the overall project of Grainbelt Express is, maybe … $10 or $12 billion in total.”
However, on July 23, the United States Department of Energy issued a release stating the federal loan guarantees had been rescinded.
“The conditional commitment, which would have provided a taxpayer-funded loan guarantee of up to $4.9 billion dollars, was issued by the Biden administration in November 2024 – one of many conditional commitments that were rushed out the door in the final days of the Biden administration,’ the release stated. “After a thorough review of the project’s financials, DOE found that the conditions necessary to issue the guarantee are unlikely to be met, and it is not critical for the federal government to have a role in supporting this project. To ensure more responsible stewardship of taxpayer resources, DOE has terminated its conditional commitment.”
However, if the Grain Belt Express can move forward without taxpayer funds, it begs the question of why federal loans were needed in the first place.
Grain Belt Express has multiple downsides for Kansans
Zakoura said the Grain Belt Express, if completed, will be independent of the Southwest Power Pool — the regional electric grid of which Kansas is a member — sending power generated in Kansas out of state.
According to Renewable Energy World, Invenergy says it has obtained most of the easements it needs to cross thousands of properties across three states through voluntary negotiations. Still, in all three states that it must cross — including Kansas — Invenergy has the right of “eminent domain,” meaning the company can simply condemn the land it needs and pay landowners “fair market value,” for the land, whether they wish to sell or not.
That drew the ire of Missouri Senator Josh Hawley, who successfully lobbied to have the loan guarantees killed.
“The cancellation of the federal loan guarantee comes after Senator Hawley secured a pledge from Department of Energy (DOE) Secretary Chris Wright to halt the project,” a release from Hawley’s office reads. “Senator Hawley sent a letter to the DOE in March urging the department to cancel the loan, as well as a follow-up letter in June.”
This is not the first time eminent domain has been used for a transmission project that saw Kansas power being shipped across the border to Missouri.
In June of 2023, the Kansas Corporation Commission — which regulates public utilities in the state of Kansas — approved a “Siting Application” for a 94-mile electric transmission project that will reroute power from the Wolf Creek nuclear power plant to Missouri and beyond.
It was the first step toward a transmission project — largely to be paid for by Kansas consumers — half a football field wide, cut through five counties and 89 miles of Kansas countryside. If landowners along the proposed path declined to sell, NextEra was able to condemn the land and force a sale.
Zakoura said this project, while not appearing to be a financial deficit to Kansas rate payers because Missouri and Illinois rate payers will ultimately cover the cost of the lines, there isn’t any real benefit to Kansans.
“The … issue is, it seems to me, how do you benefit the State of Kansas?” Zakoura said. “We’re hosting, gee whiz, we’re hosting probably more than 400 miles of high voltage lines, and those lines, when they’re built, they’ll get a 10-year property tax exemption.”
While companies often pay local governments a “Payment in Lieu of Taxes” or PILOT, it rarely comes to as much as the exempted property taxes would have, according to Zakoura.
In other words, not only will Kansans not benefit from the power the Southwest Kansas wind farms are producing, but neither will they see an offset in property taxes from the Grain Belt Express for at least a decade.
