Washington focuses on the power grid

What happened

Last week, Washington moved on two policies aimed at fixing the grid bottleneck, a topic we already discussed in our recent note.

The Department of Energy (DOE) launched the Speed to Power initiative to accelerate large-scale generation and transmission projects. The DOE has opened a Request for Information until November 21, asking utilities and developers three things: which projects are ready to build soon, where demand is growing fastest from AI, data centers, and new factories, and what permits or approvals are holding them back. The DOE will use this input to prioritize its existing funding programs and loan guarantees to bring new capacity online faster.

The House also passed the GRID Power Act, which would require the Federal Energy Regulatory Commission (FERC) to reform interconnection queues. These queues are the long waiting lines created as grid operators conduct technical studies to determine if local networks can handle the extra load. Most projects are ready to build on paper but cannot break ground or connect until these studies are cleared. The bill still needs to pass the Senate and be signed by the President before becoming law. At that point, FERC would have 60 days to review proposals from grid operators and 180 days to finalize new rules.

Impact on our Investment Case

Together, these measures aim to unlock more than 2,600 GW of proposed generation and storage projects that are stuck waiting for grid connection, with most facing delays of over five years. The goal is simple: move these projects from planning into construction faster.

Construction starts sooner

Speed to Power is designed to identify and prioritize projects that can break ground quickly and clear obstacles. Earlier approvals allow contractors to start site work and preparatory construction sooner (even if long-lead equipment takes years to arrive). That keeps crews working, improves utilization, spreads fixed costs over more revenue, and supports steadier cash conversion for names like MasTec and MYR Group.

Backlogs convert into cash

Faster interconnection decisions cut the risk that orders linger or get further delayed. For equipment suppliers like LS Electric Co Ltd and Hyosung Heavy Industries Corp, that means multi-year order books are more likely to turn into firm contracts and shipments. Approvals trigger production slot reservations and milestone payments, which strengthen working capital and improve earnings visibility even if final delivery takes time.

Pricing power holds up

Lead times for large transformers and high-voltage cables remain long. Faster approvals do not create new manufacturing capacity overnight. With plants already running at full tilt, the supply-demand imbalance persists, which allows manufacturers of heavy electrical equipment and specialty cables to maintain pricing discipline until new capacity eventually comes online.

Reliability takes priority

The GRID Power Act, if enacted, directs FERC to let reliability projects move up the line. That means dispatchable resources like gas, nuclear, or geothermal can get connected faster, and storage paired with renewables also qualifies. This ensures grids stay stable as intermittent renewables scale.That also means utilities will keep investing in the equipment needed to harden and modernize the grid, including transformers, substations, lines, and protection gear - all segments where we have direct exposure. In this respect, our grid equipment exposure benefits regardless of the generation mix. Also our recent addition of nuclear and geothermal, as sources of clean baseload, stand to benefit from this push.

Next milestones

The key dates ahead are November 21, when DOE closes its consultation, and the Senate’s decision on the GRID Power Act. These milestones will determine how quickly utilities and grid operators can move projects from paper to construction lists. Even before the law is finalized, stakeholders are likely to prepare proposals and identify priority projects, which gives the supply chain earlier visibility on demand.

Our Takeaway

A formal DOE process and a House-passed bill signal that grid expansion is now a federal priority. Even before the Senate acts, utilities and regional operators will prepare proposals and project lists. That lowers headline risk around “will these projects ever get done” and is likely to support valuation multiples for companies with visible backlogs.

These policy moves reinforce one of our strongest convictions: our portfolio has a 35% exposure to power grid infrastructure capex.