Texas Puts a Price on a Place in ERCOT's Queue, Then Freezes Data Center Permits

In the space of four days, Texas changed both the cost and the timing of building a data center on the ERCOT grid. On September 18 the Public Utility Commission of Texas adopted its large-load interconnection rule under Senate Bill 6, requiring customers to post $50,000 per megawatt of financial security before ERCOT will include them in an interconnection study. On September 21 Governor Greg Abbott directed the Texas Commission on Environmental Quality to halt all permits sought by data centers until ERCOT completes its audit of projects in the interconnection process.

The commission adopted new 16 TAC §25.194, which implements the section of the Public Utility Regulatory Act that SB 6 added in 2025. Its order says that before a large load can be included in an ERCOT interconnection study, the customer must execute an intermediate agreement, provide certain disclosures and post financial security of $50,000 per MW. The rule covers new interconnections of 75 MW or more at a single site, expansions that take a site to 75 MW or more for the first time, and expansions of sites already at that level that add 75 MW or more, according to a White & Case analysis.

The commission declined requests for industry-specific carve-outs, so the rule also captures hydrogen producers, metal manufacturers and petroleum facilities. At the intermediate agreement stage, the customer pays the $100,000 study fee, submits officer-attested technical disclosures and posts $50,000 per MW of requested peak demand. The utility returns 20% at initial energization and the rest in 20% increments as the customer meets milestones. For context, ERCOT's all-time peak demand is 85,508 MW, set in August 2023.

The governor had earlier directed the PUCT and ERCOT to audit all data centers in ERCOT's interconnection process. White & Case notes that ERCOT expects to finish its audit and verification on or around December 10, after which it will finalize classifications for Batch Zero projects and resume the large-load study process. Texas has been the easiest large market in which to build a data center. Developers and lenders will need to revisit financing arrangements that assumed a faster path.