July 1, 2025
Texas Governor Greg Abbott has approved a bill that looks to make large load customers like data centers contribute to interconnection costs when they use the state’s electricity grid, according to an article from Data Center Dynamics on Saturday, June 21.
Senate Bill 6 was signed into law on Saturday (June 21) and legislates that large load customers exceeding 75MW will have to foot some of the bill to allow them to connect to the ERCOT grid, which supplies power to Texas.
The Lone Star State is the second largest data center market in the US, with multiple gigawatt-scale campuses in various stages of development, including the first Stargate data center at Abilene.
The Public Utilities Commission (PUC) has been directed to study, and, if necessary, revise the methodology for assigning wholesale transmission costs to ensure all customer classes, including data centers, are paying their fair share.
The legislation also requires cooperatives and municipally owned utilities that have not adopted customer choice to pass through the reasonable costs to interconnect large loads.
In addition, the PUC has been directed to establish a uniform set of standards for the interconnection of large loads, to support business development and minimize the risk of stranded costs from the overbuild of infrastructure.
Large load customers will also have to disclose whether they are pursuing similar interconnection requests in Texas to provide more information to ERCOT and the PUC.
The bill will also impact large load users with onsite generation, with installations that have onsite generation capable of serving 50 percent of the facility’s demand, expected to provide information concerning these facilities to their utility and ERCOT. During periods of grid emergency, ERCOT may require the customers to use the generation or curtail load.
Under the new bill, utilities are required to establish protocols for curtailing load during emergencies for large loads connected after December 31, 2025.
The bill is part of a prevailing trend across the US, where legislators are increasingly looking to large load users to foot the bill for interconnection upgrades needed for them to connect to the grid.
Most recently, Oregon passed a bill to establish a new customer class for data centers, requiring the Public Utility Commission to allocate costs to serve the facilities on the developers. The rates will be applied to the state’s two major investor-owned utilities, Pacific Gas and Electric (PGE) and Pacific Power.
In addition, just last week, a New Jersey lawmaker proposed a bill at the state’s General Assembly that would require electric public utilities in the state to develop and apply special rules for certain data centers to protect non-data center customers from increased costs.