Overview
- The Public Utility Commission of Texas and ERCOT published new rules on July 24 that require data centers to pay for transmission lines built to serve them to prevent costs being shifted to residential customers.
- The rules establish an interconnection screening process, stronger pre‑connection standards, and a mandate that new data centers quickly reduce power when ERCOT orders them to do so to protect grid reliability.
- Regulators also proposed that data centers must register with PUC and ERCOT and report water and electricity use so state agencies can track operations they previously could not monitor.
- The agencies recommended legislative changes for the 2027 session, including expanding the Lone Star Infrastructure Protection Act to cover large data centers and clarifying regulator authority over reliability requirements.
- The actions have already prompted at least one developer to withdraw an East Texas project and intensified political pressure, including a call from Agriculture Commissioner Sid Miller for a special legislative session to act immediately.