Texas regulators pitch grid cost revamp for data centers

By Shelby Webb | 05/08/2026 06:04 AM EDT

The state Public Utility Commission is seeking to rework a system that charges big electricity users for power lines and other infrastructure.

Power lines in Houston.

Power lines are seen in Houston. On Thursday, Texas regulators discussed potential changes to how grid costs are handled for certain large projects. David Phillip/AP

Texas electricity regulators are moving forward with plans to overhaul how the state divvies up the cost of building poles and power lines as a wave of data centers heads for the Lone Star State.

Staff at the state Public Utility Commission outlined changes Thursday that would require certain large power users — mostly data centers — to pay a minimum amount in transmission and distribution costs.

PUC officials also proposed changing the incentive structure for large industrial power customers to lower their power usage during peak demand times.

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Those proposals are meant to protect residential ratepayers and small businesses from shouldering an outsize portion of the billions of dollars it will cost to upgrade electricity infrastructure to handle a surge in data center demand, said Jessie Horn, senior counsel of the PUC’s Rules and Projects Division. The plans still need PUC approval.

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