Texas enacts landmark law to curb data center power consumption amid grid strain

Overview of S. B. 6 Legislation

- Signed into law by Texas Gov. Greg Abbott on June 20.

- Requires data centers and large power consumers on the ERCOT grid to accept curtailment during firm load shed events.

Grid Load Predictions

- ERCOT forecasts an increase from 87 GW in 2023 to 138 GW by 2030 due to data center growth.

- This surge poses risks to grid reliability, especially during thermal generator maintenance in spring and fall.

Key Provisions of S. B. 6

- Mandates curtailment for loads of 75 MW or more; these loads may ramp down or switch to backup generation upon utility request.

- Introduces voluntary demand response program to encourage participation.

- Establishes new interconnection disclosure, cost-sharing rules, and protocols for co-locating large loads with existing generators.

Goals of the Legislation

- Aims to provide regulatory certainty for independent power producers and data centers.

- Emphasizes market incentives and financial rewards to boost participation.

Response from Data Center Operators

- Some operators are open to voluntary curtailment; others are resistant.

- Advance warning is important for operators with sensitive IT equipment.

Market Incentives

- Travis Kavulla from NRG highlights the need for financial incentives to encourage participation.

Interconnection Fee Requirements

- A minimum initial interconnection fee of $100,000 for large load customers is set.

- Requirement for customers to disclose any duplicate interconnection requests in Texas.

Addressing Phantom Loads

- S. B. 6 aims to reduce phantom loads that affect utility forecasts.

- Experts believe a significant number of proposed data centers may never be built due to duplicate requests.

Broader Implications

- Suggested that core provisions of S. B. 6 could be adapted by other states, particularly in the PJM Interconnection.

- Law reflects Texas' strategy to manage grid reliability amid rapid data center expansion.

- Future success relies on data center operators' willingness to engage with the new regulations. 

https://www.naturalnews.com/2025-07-01-texas-enacts-law-curb-data-center-power-consumption.html