{"id":231010,"date":"2026-04-02T00:11:09","date_gmt":"2026-04-02T00:11:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-tx\/231010\/"},"modified":"2026-04-02T00:11:09","modified_gmt":"2026-04-02T00:11:09","slug":"ercot-developers-detail-plans-to-manage-data-center-growth-amid-legislative-scrutiny","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-tx\/231010\/","title":{"rendered":"ERCOT, developers detail plans to manage data center growth amid legislative scrutiny"},"content":{"rendered":"

\t\t\t\t\t\t\tThe Texas power grid is undergoing \u201cgenerational\u201d growth, experts said during the Electric Reliability Council of Texas<\/a>\u2019 annual summit March 31 in Round Rock. Much of that growth is due to data centers\u2014an industry under scrutiny from state lawmakers as some Texas communities push back against<\/a> proposed data center developments.<\/p>\n

The big picture<\/p>\n

Over 2,000 projects totaling 453,000 megawatts are currently looking to connect to the state grid, ERCOT CEO Pablo Vegas told legislators April 1. About 357,000 megawatts of those connection requests are potential data centers, ERCOT documents show.<\/p>\n

One megawatt of electricity can serve about 250 residential customers, according to ERCOT. Demand on the grid reached a record<\/a> 85,508 megawatts in August 2023, with the state agency estimating<\/a> that demand could grow to about 145,000 megawatts by 2031.<\/p>\n

\u201cData centers and data-driven demand are fundamentally reshaping how we think about planning, operations and infrastructure,\u201d ERCOT Vice President Venkat Tirupati said during the March 31 summit. \u201cThe demand projections we are modeling today are not just incremental, they are generational, and Texas is right at the center of this transformation. At the same time, we are all challenged to deliver this transformation while maintaining affordability.\u201d<\/p>\n

For nearly two hours April 1, state senators questioned the leaders of ERCOT, the Public Utility Commission of Texas<\/a> and the Texas Office of Public Utility Counsel<\/a> about growing demand on the grid and the cost to everyday Texans. Officials were asked to provide agency updates during an interim legislative hearing on grid security<\/a>, while future hearings are expected on data center growth, the cost<\/a> of the large projects and how data centers impact water supplies.<\/p>\n

\u201cI just advise you again that the ratepayers, residential and small businesses, are feeling a significant burden when it comes to [electric] growth, which is primarily data centers,\u201d said Sen. Charles Schwertner, a Georgetown Republican who chairs the Texas Senate Business and Commerce Committee<\/a>.<\/p>\n

Zooming in<\/p>\n

Experts have noted that while Texas can expect to see \u201ca lion\u2019s share\u201d of new data center developments compared to other states, they do not expect all 400-plus gigawatts of projects to come to fruition.<\/p>\n

\u201cYou see a number like the [450] gigawatts, and it’s sort of eye-watering,\u201d Jesse Noffsinger, a partner at the consulting firm McKinsey & Company<\/a>, said during a data center panel at the March 31 summit. \u201cAt the same time, I don’t think anyone in the room thinks that is going to get built in the next three or four years.\u201d<\/p>\n

Noffsinger noted that \u201cthere’s still a lot of uncertainty\u201d about where data center projects will be located and if some will be built at all.<\/p>\n

Bharath Ravulapati, the head of grid strategy for data center developer Crusoe<\/a>, said March 31 that he expects data center projects totaling at least 50 gigawatts of power will be built in Texas by 2030. Crusoe is one of the developers of the 1.2-gigawatt Stargate<\/a> data center in Abilene.<\/p>\n

Ravulapati said Texas is attractive to developers \u201cfor many reasons: a faster interconnection process, great stakeholder processes that are working here, also permitting [processes]; it’s faster to build here than anywhere in the country. So I think all of these kind of put Texas in the No. 1 position to build data centers.\u201d<\/p>\n

The local impact<\/p>\n

Panelists noted March 31 that data center developers have an \u201cincreasingly high\u201d negative reputation in communities across the state and country. Of nearly 1,400 U.S. adults polled by Quinnipiac University in late March<\/a>, 65% said they would oppose an artificial intelligence data center being built in their community.<\/p>\n

Eric Goff, who leads Goff Policy<\/a>, an Austin-based energy and infrastructure firm, said developers often need to make commitments to local residents to earn their support for data centers and other large infrastructure projects.<\/p>\n

\u201cIn speaking with some of the operators, they take it seriously\u2014lots of proactive developers are looking for community engagement opportunities to give back to the community [and] looking at their broader needs in order to think in a community way,\u201d Goff said during the data center panel.<\/p>\n

In San Marcos, hundreds of local residents have protested<\/a> a data center proposal due to concerns about high water usage, strain on the state grid and potential negative environmental impacts. City Council members voted against moving forward with a map change that would have allowed developers to build a data center on roughly 200 acres of land during a Feb. 17 meeting, Community Impact reported<\/a>.<\/p>\n

\u201cWe’re seeing this nationally\u2014the question is, is data center load growth good for the utility and surrounding customers? … Is it driving up prices, is it making the grid less reliable?\u201d Noffsinger said March 31.<\/p>\n

Vegas, the ERCOT CEO, told reporters March 31 that communities should take the lead on discussions about individual data center projects.<\/p>\n

\u201cThere are unique elements to how data centers will integrate into communities that have to be considered on a local level,\u201d Vegas said during an interview with Texas media outlets. \u201cImportant conversations around land use, around resource use locally, all of those conversations are critical. I think that the local and state government engagement in those conversations is important.\u201d<\/p>\n

Vegas added that when \u201ccommunities that are ready to support those investments,\u201d ERCOT is prepared to help data centers connect to the grid.<\/p>\n

Last year, state legislators passed Senate Bill 6<\/a>, a law requiring data centers and other large electric consumers to supply backup power when connecting to the grid and switch to those reserves during emergencies. Proponents said<\/a> this will strengthen standards for data centers and shield residential customers from the blackouts seen during 2021\u2019s Winter Storm Uri<\/a>.<\/p>\n

\u201cWe’re going to be building the tools and technology to [implement SB 6] in a systematic way this year, so that as we start to see the actual large data center growth materialize\u2014because right now, we’re really in the planning and the development stage, for the most part, and we haven’t really seen a lot of it come online yet,\u201d Vegas said March 31. \u201cBut when we start to see that, and it really starts more heavily in 2027 through the end of the decade, we’ll have the tools ready to go to help manage that [growth].\u201d<\/p>\n

\"\"Pablo Vegas, CEO of the Electric Reliability Council of Texas, speaks with reporters during the state agency\u2019s annual summit March 31 in Round Rock. (Hannah Norton\/Community Impact)More details<\/p>\n

ERCOT is also working on a new system, called the batch study process<\/a>, aimed at helping the grid operator evaluate all the large projects seeking to connect to the grid in one study, rather than studying each proposal on its own.<\/p>\n

Vegas said ERCOT has historically considered large load proposals individually, as the agency received \u201ca handful [of requests] per year.\u201d Now, ERCOT is sorting through \u201chundreds of projects\u201d annually that may join the Texas grid. Officials plan to begin reviewing projects in batches to better understand how various developments in one area will impact one another and determine if enough power transmission resources are available to serve the planned ventures.<\/p>\n

\u201cWe’re going to be looking at a full suite, the portfolio of projects across the ERCOT system at the same time, in order to understand their respective impact … on the grid,\u201d Vegas said.<\/p>\n

Under the current system, ERCOT is in \u201cthis kind of doom loop of reevaluating and restudying as the system changes, as the neighbors change for any particular project,\u201d Vegas said at the March 31 summit.<\/p>\n

\u201cThat’s really an untenable position to be in if you are a developer, where you’re spending tens of millions of dollars on infrastructure,\u201d he added. \u201cAnd you\u2019ve got transmission companies planning to build millions and millions, and sometimes billions of dollars in transmission service. You need to have certainty in that process.\u201d<\/p>\n

The ERCOT CEO told state senators that agency officials plan to bring a batch process proposal to ERCOT\u2019s board of directors<\/a> in June. If the board signs off on the plan, it will be considered by the PUC, which regulates ERCOT, in July with the goal of conducting the first batch study by the end of the summer, Vegas said April 1.<\/p>\n

He said the batch study process would help ERCOT approve projects based on available transmission capacity in each region of Texas and identify where more power transmission needs to be built.<\/p>\n

\u201c[This will] ensure that the monies that are going to be spent on the infrastructure, and the transmission system in particular, are going to be prudently invested\u2014dollars that are going to serve real projects for local communities,\u201d Vegas said March 31.\n\t\t\t\t\t\t\t<\/p>\n","protected":false},"excerpt":{"rendered":"The Texas power grid is undergoing \u201cgenerational\u201d growth, experts said during the Electric Reliability Council of Texas\u2019 annual…\n","protected":false},"author":2,"featured_media":231011,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[132,134,133,89324,89322,89317,89325,89330,89331,5304,6083,3413,89329,89320,89326,86415,89323,89318,89327,89319,42729,13847,27854,89328,89316,89315,293,89321,1863],"class_list":{"0":"post-231010","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-austin","8":"tag-austin","9":"tag-austin-headlines","10":"tag-austin-news","11":"tag-bharath-ravulapati","12":"tag-charles-schwertner","13":"tag-crusoe","14":"tag-data-center-developers","15":"tag-data-center-pushback","16":"tag-data-center-scrutiny","17":"tag-data-centers","18":"tag-electric-reliability-council-of-texas","19":"tag-ercot","20":"tag-ercot-batch-study-process","21":"tag-ercot-innovation-summit","22":"tag-eric-goff","23":"tag-interim-charges","24":"tag-jesse-noffsinger","25":"tag-mckinsey","26":"tag-nimby","27":"tag-opuc","28":"tag-pablo-vegas","29":"tag-public-utility-commission-of-texas","30":"tag-puc","31":"tag-san-marcos-data-center","32":"tag-stargate-abilene","33":"tag-texas-data-center-growth","34":"tag-texas-legislature","35":"tag-texas-office-of-public-utility-counsel","36":"tag-texas-senate"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts\/231010","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/comments?post=231010"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts\/231010\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/media\/231011"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/media?parent=231010"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/categories?post=231010"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/tags?post=231010"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}