The Public Utility Commission of Texas is undertaking rulemakings to implement S.B. 6, which materially revises the regulatory framework for large electrical loads and related behind-the-meter projects in response to rapid growth in interconnection demand across Texas.
In recent years, large-load customers, such as data centers, have flocked to Texas. In a filing with the PUCT on Oct. 20, the Electric Reliability Council of Texas revealed that 205 gigawatts of large load are currently in the ERCOT interconnection queue, of which 70% is from data centers.
More astonishing is that only last year, the queue held 56 GW of load — an increase of over 227% in the amount of load-seeking interconnection in just one year.
S.B. 6, enacted on June 20, introduces new interconnection and emergency curtailment requirements for large-load customers — defined as customers with a demand threshold of 75 MW — to mitigate risks of stranded infrastructure and grid reliability issues, while also implementing new behind-the-meter requirements and kicking off an evaluation of ERCOT's transmission planning methodology.
Compliance with S.B. 6 means higher up-front costs for developers and the implementation of flexible operating models for large-load customers. At the same time, S.B. 6 represents proactive action to address issues that other states are also facing with large-load growth.
The law will likely provide certainty that will encourage greater investment in the generation needed to meet growth. Stakeholders in Texas, as well as regulators in others states, will watch carefully as proceedings at the PUCT move forward to resolve the details of implementation.
