Texas regulators have imposed the first hard operating requirement on the data centers crowding onto the state grid, and the industry is weighing whether to fight it in court. The Public Utility Commission of Texas voted 5-0 on July 9 to adopt rules requiring data centers and other “large computational loads” in the Electric Reliability Council of Texas footprint to stay connected through temporary grid disturbances, according to E&E News by POLITICO, which reported the vote. Facilities that trip offline during a disturbance can be ordered to disconnect from ERCOT entirely.
ERCOT told the commission in an impact statement filed in PUC Project 54445 that “without these requirements, events involving [large computational load] loss would increase in magnitude, potentially leading to system frequency and voltage instability.”
Data centers and crypto miners are built to drop off the grid within milliseconds of detecting a voltage or frequency blip and switch to backup generation — a design that protects their equipment but, at gigawatt scale, yanks demand off the system all at once.
Ricardo de Azevedo, chief technology officer at backup-power provider ON.energy, told E&E News that “if 2.6 GW trips at the same time in West Texas, it can take down the whole region.” Any project that received ERCOT approval to energize on or after Nov. 15, 2025, must comply.
Jessi Goostree, executive director of the Texas Blockchain Council, told E&E News her members expect to pay $500,000 to $1 million per megawatt to meet the ride-through standard, running into hundreds of millions of dollars for some operators. She said ERCOT should first have studied whether the state’s $33 billion transmission build-out, new generation and revised market products could address the problem.
Cameron Poursoltan, director of Texas energy policy for the Data Center Coalition, said the commission — not ERCOT — should have written the requirements, calling the outcome “a meaningful expansion of ERCOT’s authority into territory we think belongs with the PUCT.”
Katie Coleman, outside counsel for Texas Industrial Energy Consumers, said her members are unaffected but the rule sets a “dangerous precedent,” and that the group would sue if similar mandates reached LNG plants or semiconductor fabs.
Commission staff rejected the jurisdictional argument. R. Floyd Walker, senior counsel of market analysis at the PUC, wrote to commissioners that regulating a facility’s electrical infrastructure is not the same as regulating the facility: “For example, regulations for home wiring directly impact homeowners but they cannot be reasonably described as regulating homeowners.”
The ride-through vote lands in the middle of a compressed regulatory calendar. Gov. Greg Abbott’s June 10 directive ordered the PUC and ERCOT to deliver a joint memorandum to his office by July 17 summarizing what they can do under existing authority to keep data-center infrastructure costs off residential and small-business bills, identifying statutory limits, and recommending legislation.
That deadline passed Friday; the memorandum had not been posted publicly as of this writing. The same directive requires the commission to initiate formal action to reduce residential transmission costs by July 31 — 12 days out. Separately, the large-load interconnection standard required by Senate Bill 6, proposed as 16 Texas Administrative Code §25.194 in PUC Project 58481, remains pending final adoption after comments closed in April. That draft would charge new loads of 75 megawatts or more a nonrefundable $50,000-per-megawatt interconnection fee and require them to fund 100% of direct interconnection costs.
Taken together, the rules point the same direction The Texas Dispatch has tracked through the Batch Zero rollout: projects that bring their own reliability and their own infrastructure impose less on everyone else’s bill than projects that draw on capacity Texans already paid for.