Texas’ main power grid operator approved two landmark sets of rules Tuesday that would shape the future of data centers in the state if finalized.
One package establishes new criteria and processes for bringing big electricity users onto the grid — by reviewing them in batches.
The other rules require data centers and cryptocurrency-mining facilities to stay online during brief grid disruptions, attempting to mitigate a risk of cascading outages that could imperil the entire electric system.
The Electric Reliability Council of Texas’ board of directors approved the changes as data centers and other large electricity users jockey to come online in Texas and across the country. The state Public Utility Commission will have the chance to review both decisions, which affect how and when new developments could be built to help serve artificial intelligence operations.
On Tuesday, ERCOT officials said data centers and other large loads have requested to use roughly 450 gigawatts of power — more than five times the all-time peak power demand recorded within the ERCOT region.
ERCOT officials previously said as much as 228 GW of that power could come online by 2032, but CEO Pablo Vegas said Tuesday that estimate was “too high of a figure based on realistic expectations.” The rules approved by ERCOT’s board this week would help bring estimates in line with reality and help data centers develop without jeopardizing Texas’ grid, he said.
ERCOT’s new rules “could be solving a national issue on how to do this in a way that can be done reliably and stably,” Vegas said, adding that they were created with consideration for economic growth and costs.
The Data Center Coalition did not immediately respond to a request for comment Tuesday.
Also Tuesday, ERCOT officials said the region could break its record for power demand this summer. Dan Woodfin, ERCOT’s vice president of system operations, said demand could rise above 92 GW thanks to hotter-than-normal weather and increased demand from crypto-mining facilities and data centers. The previous record — 85.5 GW — was set in August 2023.
But much of the attention at ERCOT’s meeting was focused on Batch Zero — the first class of data centers that would be granted power through the new system of studying large load requests in groups. That approach can more accurately allot power based on regional transmission capacity, according to ERCOT officials.
Batch Zero will allocate power to data centers based on how much transmission is available on the grid now. Projects not included in Batch Zero may have to wait years for more transmission to be built to get all the power they want, setting up a scramble to be included in the initial class.
Jeff Billo, vice president of interconnection and grid analysis at ERCOT, said Tuesday that he expects about 100 GW’s worth of projects to meet the approved criteria to be part of Batch Zero. Those standards — which were approved as part of the new rules — include nonrefundable fees, site control requirements and other milestones that show a project is ready to be built.
“For Batch Zero, we needed to have a narrow focus, and so we wanted to focus on projects that were mature in that study process,” Billo said.
Adam Jordan, a director with the Enverus analytics firm, said the criterion established Tuesday will necessarily create winners and losers in the race to join Batch Zero.
“But there is some sense of relief [for data center developers] now that they have something to work with and can start moving forward,” Jordan said. “For ERCOT, it gives them a path forward to start clearing this log jam.”
ERCOT has not developed rules for other batches outside of Batch Zero and likely won’t until February 2027, officials said at the board meeting.
Thomas Gleeson, chair of the Public Utility Commission, said Tuesday that his commission would vote on June 18 whether to give final approval to the Batch Zero rules.
Another set of rules approved Tuesday would require data centers and crypto-mining facilities to stay online and “ride through” brief power disruptions on the grid. If a data center were unable to weather those disruptions under the new plan, it could be ordered to disconnect from the grid until it came into compliance with the new rules.
Experts and grid managers across the country have warned that data centers tripping offline during brief power disruptions could spark a cascading chain of events that could lead to blackouts.
Billo said ERCOT has already logged “a number” of instances when data centers and crypto miners have tripped offline during “normal faults” on the system.
“These loads are tripping off, and that creates a reliability issue,” Billo said.
Data center supporters have pushed back, saying it would cost billions of dollars and take years to redesign their facilities to comply with these types of rules.
The PUC would ultimately need to give final approval for the so-called ride-through requirements, but it was unclear Tuesday when the commission might bring the issue up for a vote.
Jordan with Enverus said ERCOT and Texas regulators have been working closely on the ride-through proposal, but he said pushback from data centers may not be enough for the utility commission to make major changes to the rules approved Tuesday.
