The first test of how Texas will treat data centers that sit behind an existing power plant has ended with a firm answer: in a grid emergency, the load goes, regardless of how much the paired generator produces. On July 24 the Public Utility Commission of Texas approved a net metering arrangement between the Goodnight wind farm in Armstrong County and a proposed AI data center, and agreed with ERCOT that the two data centers behind the wind farm's single interconnection must together be able to curtail 525.5 MW within 30 minutes.
The order in Docket No. 59220 is the first decided under the co-location provisions of Senate Bill 6, and it sets the terms for every developer hoping to place compute behind existing Texas generation.
The arrangement
According to a White & Case analysis of the case, FGE Goodnight I and Crusoe Energy Systems applied on January 9 for approval to net meter Goodnight Wind, an existing 265.5 MW wind facility, with Crusoe Load Two, a proposed 260 MW AI data center to be developed with Google. The data center would sit behind the wind farm's point of interconnection, sharing a settlement meter so that its consumption nets against wind output. The broader site includes 933 MW of off-grid gas turbines under construction, but only one phase was to co-locate with the wind farm. In March, Crusoe transferred the co-located load assets to Ensign Infrastructure, which replaced Crusoe as the large load customer.
An earlier PUCT order in April had already imposed a 265.5 MW, 30-minute curtailment obligation on the adjacent 265 MW Crusoe Load One. ERCOT's system impact study recommended approving Load Two with its own full 30-minute curtailment duty, bringing the total across both data centers behind the one wind farm to 525.5 MW.
The dispute
Ensign, Crusoe and Goodnight Wind argued that this was double-counting. Their position, as summarized by White & Case, was that the statute is meant to offset the specific loss of generator capability caused by netting the plant against load, not to control all load at a site. ERCOT countered that if curtailment were capped at the paired generator's size, developers could pair large compute loads with small generators and leave most of their firm load uncurtailable. It cited a grid managing more than 233 GW of pending large load applications.
The commission sided with ERCOT and its staff. Because both data centers net behind the same interconnection, it reasoned, if Load One curtailed in an emergency but Load Two did not, Load Two would simply absorb the wind farm's output behind the meter and that capacity would never reach the grid. The purpose of the emergency condition, making the existing plant's capacity fully available, would be defeated.
The commission also dismissed Crusoe's argument that 30-minute shutdowns can damage server clusters and cause data loss. It held that grid requirements take precedence and treated those risks as commercial trade-offs accepted in exchange for faster interconnection.
The conditions
The order largely applies the standard conditions the commission adopted for co-location in its SB 6 rulemaking, Project No. 58479. Load Two must fully disconnect from the ERCOT system on ERCOT's order during a transmission emergency, without compensation, and the wind farm must make all available capacity available for dispatch. At the developers' request, ERCOT must give at least 60 minutes' notice when practicable. The data center may not take part in any ERCOT or utility demand response product, ancillary service, Emergency Response Service or load management program. Ensign argued that barring data centers from paid demand response deprives ERCOT of controllable load during stress; the commission disagreed.
The conditions attach to the physical assets and bind future owners. Loads subject to them are removed from the load shed obligations of Golden Spread Electric Cooperative and Greenbelt Electric Cooperative. Between 36 and 60 months after the order, the parties must apply for a determination on whether the conditions should continue, change or end. ERCOT found no stranded or underused transmission assets, so no hold-harmless proceeding was needed.
The SB 6 framework also carries a financial safeguard: net metering parties are liable if co-location causes a shared transmission asset to carry at least 25 percent less power than expected, so that retail customers do not pay for stranded lines.
Why it matters
The ruling closes off a route that looked attractive to developers. Pairing a data center with an existing plant promised faster access, since the load nets against generation already connected. Texas has now said that the benefit comes with a cost: every megawatt of co-located load must be curtailable in an emergency, uncompensated, and cannot earn money from demand response.
The arithmetic shows the stakes. Goodnight Wind is 265.5 MW. The two data centers behind it total about 525 MW. A cap tied to generator size would have left roughly half of that load firm on the grid in an emergency. The commission's reading means none of it is.
White & Case suggests some developers may instead look to the Batch Zero study process ERCOT launched in June, including a withdrawal-limited private use network model that caps net grid draw at the interconnection point. The firm also notes that mandatory 30-minute shutdowns could encourage long-duration storage and fully islanded microgrids. It adds that upcoming cases involving behind-the-meter nuclear co-location should show whether the commission applies the same conditions to every generation technology.
The wider Texas squeeze
The ruling came days before Governor Greg Abbott, on August 3, directed the PUCT and ERCOT to audit all data centers in the large load interconnection queue. The audit will ask each project for its funding sources, including tax incentives, its power procurement plans, its annual and peak water use, its community engagement and its ownership. ERCOT said it would postpone the next phase of Batch Zero, which had been scheduled to start on August 7, until the audit is complete.
Taken together, Texas is signaling that speed to power is no longer the state's only priority. Data centers can still connect, behind existing plants or through the queue, but on terms that put grid reliability first.