Texas Wants $100K/MW From Datacenter Developers. Here's What That Means.

Here's what happened and why it matters.

1. Batch Study Process Replaces Individual Queue

ERCOT is scrapping the current first-come, first-served large load interconnection study process. In its place: a batch study system where projects are grouped and studied together on a fixed cadence.

The numbers from ERCOT's stakeholder survey tell the story. 89% of respondents favor a six-month batch cadence. Not a single one of the survey's 30+ questions received unanimous agreement, which ERCOT's Jeff Bill acknowledged plainly: "Not everyone is going to agree with everything in this process, and we have to understand there could be compromises."

The first batch, called "batch zero," is the transitional group. ERCOT is targeting a March 4 filing for the revision request, with workshops running through spring to get it approved at the June board meeting. Eligibility criteria for batch zero came down to two factors stakeholders could agree on: operational readiness and strong financial commitment.

Four sets of revision requests are planned total:

1. Batch zero (transitional): March 4 filing, June board target
2. Collocated generation rules: June board target (may slip)
3. CLR concept: June board target (may slip)
4. Batch 1+ ongoing process: Later in 2026

The chairman pushed hard on transparency, specifically requesting a portal where developers can track where projects sit in the process. That's a direct response to complaints about the current system's opacity.

What this means for developers: the days of submitting an interconnection study and waiting in an undefined queue are ending. You'll know when the next batch opens, when it closes, and roughly when results come back. The tradeoff is that if you miss a batch window, you're waiting six months for the next one.

2. Net Metering for Co-Located Large Loads (Project 58479)

This is the rule governing datacenters that co-locate with existing generation resources to get behind-the-meter power. Staff presented a proposed adoption order for new Section 25.205, which defines how ERCOT studies these arrangements, who carries the burden of proof, and what conditions the commission can impose.

Two significant changes since the last draft:

The burden of proof shifted. Applicants now must support their application with evidence when they open the docket, not after ERCOT files its study results. Commission staff was explicit about why: "The burden does not lie with ERCOT to prove that the application should be approved. ERCOT is a third-party expert providing recommendations." If you're filing a net metering application, bring your data on day one.

The batch study replaces the TSP analysis. Under the current process, a transmission distribution utility conducts a transmission security analysis that feeds into the net metering study. Once the batch study process goes live, that batch study becomes the transmission security analysis. ERCOT's Nathan Bigbee confirmed: "The TDSP will no longer be submitting that. That is our expectation."

This avoids duplicative work but creates a transition question. Which rules apply to your project depends on when you file. If the batch study NPRR isn't in effect yet, you need a completed large load interconnection study under the current process. If it is in effect, you need a completed batch study. The chairman acknowledged this needs to be "really clear" in the final rules.

The commission didn't vote on this item. Chairman wants to resolve remaining issues and bring it back March 12.

Commissioner Yaltman raised a pointed question about conditions the commission can impose. The rule uses "may include" followed by a list connected with "and," which creates ambiguity about whether all listed conditions must apply together or whether any single condition can be imposed independently. Staff intends the latter, but the language needs cleanup. Seems minor, but for developers negotiating conditions on a net metering arrangement, the difference between "all of these" and "any of these" is enormous.

3. Large Load Interconnection Standards Under SB 6 (Project 58481)

This is the big one for project economics. Staff proposed new Section 25.194, which implements Senate Bill 6's large load interconnection standards. The headline number:

$100,000 per megawatt in financial security just to enter an ERCOT interconnection study.

But that's not the full picture. The rule creates a two-stage financial commitment:

Stage 1 (Intermediate Agreement): Before your project can be included in an ERCOT interconnection study, you execute an agreement requiring disclosures and $100K/MW in financial security.

Stage 2 (Interconnection Agreement): Within 30 days after ERCOT completes the study, you execute a second agreement with updated disclosures, a non-refundable $100K/MW interconnection fee, financial security for significant equipment, contribution-in-aid-of-construction for interconnection costs, and financial security for system upgrades.

For a 100MW facility, that's $10 million in financial security before the study, another $10 million non-refundable after it, plus construction contributions and equipment bonds on top. The rule also specifies consequences for withdrawing capacity or missing milestones in your phased energization schedule.

The chairman explicitly flagged the tension at the heart of this rule: "We're trying to solve an interesting equation here to make sure that these projects are real but not set thresholds so high that real projects don't come to Texas."

He didn't call a vote. He wants more time on the deposit amounts, site control requirements, and feedback from market participants. Multiple companies have already been briefing commissioners individually on their concerns.

This is the rule that separates serious developers from speculative queue-squatters. The question is where the line falls.

What Comes Next

March 4 is the first big date. That's when ERCOT plans to file the batch zero revision request.

March 12 is the next PUCT open meeting, where the net metering rule comes back for a vote.

The large load interconnection standards (SB 6 implementation) don't have a firm date yet. The chairman wants more input before moving forward, which means developers and their lobbyists have a narrow window to shape the final deposit amounts and milestone requirements.

All three rules are connected. The batch study process feeds into the net metering analysis, which operates under the financial security requirements of SB 6. Get one wrong and the others don't work.

For anyone building in Texas, February 20 wasn't just another open meeting. It was the day the commission started putting a price tag on the interconnection queue.