Texas law gives grid operator power to disconnect data centers during crisis

Summary

Dive Brief: Data centers and other large, non-critical power consumers connected to the Electric Reliability Council of Texas transmission grid must accept curtailment during firm load shed events under a landmark law Republican Gov. Greg Abbott signed Friday. Senate Bill 6 pairs mandatory curtailment with a voluntary demand response procurement program under which loads of 75 MW or more could ramp down or switch to backup generation at utilities’ request. It also includes new interconnection disclosure and cost-sharing rules, mandatory interconnection study fees and protocols for colocating large loads with existing generators. S.B. 6 “will provide regulatory certainty for independent power producers, such as Vistra Corp. and NRG Energy, and data centers seeking colocation arrangements,” Capstone energy analysts Monica Chen and Jack Painter said in a Monday note. Dive Insight: Utilities, energy system analysts and ERCOT expect exponential growth of data centers and other large loads in Texas over the next several years. ERCOT forecasts 138 GW of large loads on its grid by 2030, up from 87 GW this year. Even if only a fraction of proposed data centers get built, the boom could threaten grid reliability during the spring and fall months, when many thermal generators go down for planned maintenance, Aurora Energy Research said earlier this month. Reliability is already a concern in some parts of ERCOT — including the San Antonio area, where ERCOT is deploying more than 400 MW of mobile generation units and inked a costly “reliability must run” agreement with an aging 400-MW gas plant. Aurora models suggest data centers will be the largest single source of load flexibility available to mitigate Texas’ reliability risk. By 2030, up to 50% of the expected 35 GW of ERCOT’s data center capacity could provide some degree of emergency reliability support, Aurora said. S.B. 6 authorizes the Public Utility Commission of Texas to develop two demand management programs — one man...