Gov. Greg Abbott is praising new moves by Texas regulators that he says will prevent residential ratepayers from subsidizing the state’s data center boom.
In a filing sent to the governor this week, the Public Utility Commission of Texas (PUCT) and the Electric Reliability Council of Texas (ERCOT) outline steps to make “large computational loads” pay more of their own costs and to tighten reliability rules for massive new projects.
This comes as polling has shown Texans are concerned that the energy-intensive projects will strain the power grid and water supply.
On June 10, Abbott ordered regulators to ensure data centers pay for the transmission and other infrastructure they require instead of shifting those costs onto Texas families. He also directed PUCT and ERCOT to structure interconnections so data center growth helps lower residential electric bills and to develop additional protections for ratepayers.
PUCT Chairman Thomas Gleeson’s July 17 response embraces that framing, saying Texas should welcome economic development “but it must do so in a manner that prioritizes affordability, reliability, and the interests of the residents who depend on the grid.” He stressed that Texans “will not be negatively impacted by the interconnection of these large electric consumers.”
The commission’s filing describes new rules and rulemakings aimed squarely at large loads. A February rule standardizes how utilities report proposed big loads into ERCOT’s forecasting, which regulators say will help avoid overbuilding transmission that would otherwise flow into customer rates.
Another change goes to who pays for new steel in the ground.
After a May review found that rapidly growing demand from large computational loads is driving costly grid upgrades, PUCT opened a rulemaking to require big loads to shoulder those costs. The proposal would make large customers post financial security for interconnection, use any forfeited security to offset transmission rates, and start paying transmission charges as soon as capacity to serve them is available—even if the data center hasn’t energized yet.
Abbott’s office trumpeted that shift, saying PUCT is “requiring data centers to not only pay for transmission infrastructure built to serve them but contribute toward meaningfully reducing residential electric bills.”
Regulators are also trying to keep existing megawatts from quietly disappearing into private deals.
A March rule says generation that was available to Texans before September 1, 2025 must remain available, even if it will primarily serve a new large load going forward. Any such arrangement must be vetted by ERCOT, and PUCT can impose conditions to protect reliability.
Meanwhile, ERCOT is moving to a “Batch Zero” study of all qualifying large loads of 75 megawatts or more, designed to evaluate their combined impact and identify needed upgrades through 2032. Future batch studies and a new interconnection‑screening process are meant to prevent clusters of data centers from overburdening the grid.
Beyond current authority, PUCT and ERCOT are asking lawmakers to give them clearer power over big end‑users.
They want explicit authority to set reliability requirements for large computational loads, the ability for ERCOT to order those loads to curtail directly, mandatory registration of large data centers with both agencies, and an expansion of the Lone Star Infrastructure Protection Act to cover owners of big load facilities, not just generators and transmission owners.
Currently, the Lone Star Infrastructure Protection Act bars certain foreign‑linked entities from owning or controlling critical grid infrastructure, including generation and transmission assets. Regulators want the act amended to cover owners of large computational load facilities as well, warning that foreign state actors could “maliciously use large computational load facilities to negatively impact the ERCOT grid.”
Abbott is backing those ideas, saying “residential ratepayers will not foot the bill for this industry’s growth” and vowing to work with the Legislature to codify the new standards.
