With just two per cent left to be completed, the project is being held up by the reluctance of Kampung Sungai Terentang residents to give up their land.
Energy, Water and Communication Minister Datuk Shahziman Mansor said the Pakatan Rakyat-led Selangor government was continuing to hold the Federal Government to ransom over the CAR project.
He predicted a repeat of the blackouts of January 2005 blackout, which caused billions of ringgit in losses, if the impasse continued.
"The situation looks bleak as the Selangor government continues to hold the Federal Government to ransom on the project," he said.
The 6,000 villagers are not willing to surrender their land for the project despite a High Court decision handing the land, once owned by TNB, back to the company.
Shahziman said Selangor Menteri Besar Tan Sri Abdul Khalid Ibrahim had asked that high voltage underground cables be laid in the village.
He had also suggested an alternative route that would add another 7km to the length of the grid.
Shaziman said the first option would take a minimum of two years to complete and cost an extra RM120 million.
The second would require more land acquisitions, offered no guarantee of success and would cost RM70 million extra.
TNB's original plan, where the grid would be built across the village, would take only three months to complete with construction costs amounting to RM12.2 million.
Kampung Sungai Terentang residents had been promised compensation if they were to move to a new location, as well as public facilities such as a library and a community hall
Shahziman said he had submitted a letter to Khalid to allow the power grid project to be speeded up.
"This matter was brought up during the State Economic Action Council meetings over the last two months.
"However, the state government has yet to come to a decision on the matter."
In a meeting with ministry representatives in July, Khalid had pledged that the problem would be resolved within three weeks.
"However, until today, the state government is dragging its feet in finding a solution."
The RM324 million CAR project began in July 2005. It was to be completed in August last year.
It involves the laying of 60km of 275kV transmission lines from Bukit Tarek in Rawang to Kampung Chubadak in Sentul.