Michael Minasi | KUT News
The Public Utility Commission of Texas finalized new rules for data centers looking to connect to the state’s power grid.
The Public Utility Commission of Texas on Thursday approved stricter standards for data centers looking to connect to the state’s power grid — the final step in the development of new regulations meant to weed out speculative projects.
The Electric Reliability Council of Texas, or ERCOT, which operates the state’s main power grid, approved the new standards earlier this month, before passing them onto the Public Utility Commission for final approval.
When large energy consumers want to join the state’s power grid, ERCOT will now evaluate them in a group study, rather than individually. ERCOT says it will notify applicants for the first study, known as “Batch Zero,” in August.
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The study will prioritize projects that are further along in the development process, and require large energy users to post a financial security equal to $50,000 per megawatt of the proposed project in order to be included.
“This new process represents a fundamental shift in how ERCOT manages the significant growth of large load interconnection, providing a structured, transparent path forward that protects reliability for Texans while supporting the state’s continued economic growth,” ERCOT President and CEO Pablo Vegas said in a news release.
Data centers and other large energy consumers looking to connect to the grid are requesting five times the amount of power used to power the entire state during record-breaking demand.
ERCOT is trying to figure out which data centers are actually ready to build in Texas — and what infrastructure will be needed to connect them to the power grid.
Bryan Clark, a partner at the global energy firm Bracewell LLP, said unprecedented economic growth has created a need for Texas to build more transmission infrastructure — such as power lines and transformers.
“I think it’s both organic to the data center industry but also just unprecedented economic growth in Texas,” he said.
Jared Berg, another partner at Bracewell, said the state’s clear standards are part of the reason data centers are flocking to Texas.
“Why is there so much industrial load that’s attracted to the state?” he said. “It’s because we have that inclination to set the rules of the road and make it clear so that companies know how to operate and the right way to operate.”