AUSTIN, Texas — Texas lawmakers are again weighing how to manage the growing power demand from data centers and other large electricity users as questions mount about the long-term reliability and cost to the ERCOT grid.
The Texas Senate Business and Commerce Committee on Tuesday heard testimony from multiple speakers about the reliability of the Electric Reliability Council of Texas grid, particularly whether additional legislative changes are needed to strengthen the energy market as large loads continue to connect.
Benjamin Barkley, chief executive of the Office of Public Utility Council, told the committee that “we still need continued policies that ensure that the infrastructure costs for transmission growth that is caused by large loads are paid for by large loads.”
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University of Houston energy fellow Ed Hirs said data centers consume about 10 gigawatts of power from the Texas grid and argued the growth is driving up costs. “Well, the ERCOT grid, in conjunction with, of course, the legislature and the governor, have been welcoming to all comers. The fact of the matter is it’s costing everyday Texans a lot of money,” Hirs said.
ERCOT President and CEO Pablo Vegas told the committee that policy changes are needed as more data centers are expected to come online in the next few years. Vegas suggested legislation that would allow ERCOT to notify companies before an emergency event to begin curtailing energy usage.
“The grid doesn’t have to be in an emergency every time the data centers help out to pull back on their usage,” Vegas said.
Hirs said, “We’ve been calling for redesign for more than a dozen years. It’s high time the legislature and every one of them in the legislature got on board with fixing this grid.”
Senate Bill 6, passed during the last legislative session, established a way to plan for interconnection, operations and costs related to providing services to large-scale load users. Hirs criticized the measure, saying, “Senate Bill 6 was not even a real band-aid.”
Gov. Greg Abbott has called for changes to how the industry is regulated in Texas. Joshua Blank of the Texas Politics Project at the University of Texas at Austin said lawmakers will ultimately decide what comes next. “It is going to ultimately be up to the legislature to come up with the specific mechanisms by which the state reins in the growth in data centers,” Blank said. He also noted, “the legislature has lots of ways to address this issue, just not yet.”
Under the current provisions of Senate Bill 6, the Public Utility Commission of Texas has until Dec. 31 to adopt any final rules regarding transmission cost assignments and large electrical loads.