DOE puts up to $50M of Defense Production Act money into Virginia lines

The US Department of Energy said on October 16, 2026 that it intends to put up to $50 million of Defense Production Act (DPA) funding into Virginia Energy's Grid Enhancing Technologies for Virginia & West Virginia Large Load Growth project, which would reconductor existing lines and add dynamic line rating for an estimated 290 MW of added transmission capacity across Appalachian Power's Virginia system. DOE says the upgrades would arrive "one to four years faster than conventional transmission upgrades," in a proposed 48-month project led by the state agency with Appalachian Power, Potomac Edison and regional partners.

Appalachian Power said the same day that it will be the primary subrecipient of $40 million of the money. It helps pay to upgrade about 14 miles of 138 kV line in the Lynchburg area and to add dynamic line rating, which uses real-time conditions to work out how much a line can safely carry, to four transmission lines: Museville–Smith Mountain, Fieldale–Thornton, Axton–AE2-140 and Claytor–South Christiansburg. The project's name points at the demand behind it. In regulatory filings, Cardinal News reported, the utility has said it is seeing "explosive" demand in Virginia from potential large-load customers, "primarily" data centers.

One award, two programs

Which federal program is paying depends on who is describing it. DOE's release says DPA. Appalachian Power's release calls the same money "a $40 million award to the Commonwealth of Virginia through" DOE's SPARK program, and Virginia Energy Director Vince Maiden, quoted in a release from Rep. John McGuire's office, said: "Through SPARK, we will put advanced technologies to work on existing transmission lines to expand capacity, reduce energy losses and support the economic growth that creates good jobs across the Commonwealth."

Cardinal News, which covered Energy Secretary Chris Wright's announcement at an Appalachian Power substation in Lynchburg on October 16, reported that the project was chosen through SPARK but that, according to DOE, the money comes from the DPA rather than SPARK. Virginia Energy is not among the 31 prime applicants on DOE's September 2026 list of SPARK selections, the $1.9 billion round The Duck Curve covered in DOE selects 31 SPARK grid projects for $1.9 billion in federal funding. The two pots have different origins. The SPARK program page says the round is funded through the Infrastructure Investment and Jobs Act's Grid Resilience and Innovation Partnerships program. The DPA money traces to section 30004 of Public Law 119-21, the July 4, 2025 reconciliation law DOE calls the Working Families Tax Cut, which appropriates $1,000,000,000 "to remain available until September 30, 2027, to carry out the Defense Production Act (50 U.S.C. 4501 et seq.)." DOE describes that money as appropriated "for energy-related projects deemed critical to national security"; the section itself names no energy purpose.

The legal hook is Presidential Determination No. 2026-10 of April 20, 2026, which finds that "America's aging and constrained electric grid infrastructure poses an increasing threat to national defense" and lists "transmission lines and conductors" among the items essential to the national defense. Its stated reasoning centers on supply chains: foreign competition, long production lead times and "an overreliance on imported equipment." The Virginia project under it includes a utility line rebuild.

A rebuild already on the books

The 14-mile line is Appalachian Power's New London-Otter rebuild in Bedford and Campbell counties, according to Cardinal News, and it was on the utility's schedule before any federal money was named. The project page announced a proposed route on September 4, 2026, says the company plans to file with the State Corporation Commission of Virginia in early 2027, and says that if the project is approved, "construction is expected to begin summer 2028 and conclude by summer 2030." The fact sheet describes rebuilding approximately 14 miles of 138 kV line "in or near the existing right-of-way," replacing a 1940s-era line, on steel structures expected to be about 20 feet taller than the existing ones, with minor reroutes out of that right-of-way under consideration in some areas. Reconductoring, in this case, comes with new towers.

Appalachian Power told Cardinal News in an email that the rebuild is expected to be complete by June 2029, about a year ahead of the project page. Brian Abraham, the utility's president and chief operating officer, told the outlet that Appalachian Power regularly considers investments like these regardless of federal funding, but that the subsidy reduces how much of the cost is passed to customers. He said the final price has yet to be set and that, because the company matches the federal money, the total will be at least double the grant.

DOE's release gives no total project cost. Its October 5, 2026 release for an earlier DPA transmission project did: up to $150 million in DPA funding alongside $268 million in non-federal funding for the Alaska Energy Authority's Beluga-Healy line, approximately 223 miles of new transmission. The two releases add up to $200 million in DPA grid money by our sum, all of it "up to."

Outlook

DOE describes the Virginia money as an intent to fund a proposed project, and the New London-Otter rebuild still needs Commission approval on an application Appalachian Power plans to file in early 2027. If the funding agreement draws on the Public Law 119-21 appropriation, the statute's terms would have it committed by that money's September 30, 2027 availability date, which leaves DOE less than a year to turn a stated intent into a signed award.