Texas sets a July 31 deadline on data center power costs

Texas has until July 31 to start cutting what residential customers pay for transmission, and the mechanism is sitting in a docket most site selectors have never opened. It is Public Utility Commission of Texas Project No. 58484, Evaluation of Transmission Cost Recovery, and it carried 119 filings as of Saturday.

Why it matters

Governor Greg Abbott’s June 10 directive ordered the PUCT to require data centers to fully fund the electric infrastructure built to serve them, ordered the PUCT and ERCOT to deliver a joint memorandum of further ratepayer protections by July 17, and set July 31 as the date the commission must act on residential transmission costs. On July 24 the governor’s office announced what came back: rules to stop large loads from diverting existing grid power, new interconnection screening, connection standards for data centers, and a requirement that they cut load quickly when ERCOT directs it. “Residential ratepayers will not foot the bill for this industry’s growth,” Abbott said.

The federal layer moved the same week and moved softer. The Tennessee Valley Authority signed the White House Ratepayer Protection Pledge on July 23, a voluntary commitment with no enforcement attached. A federal judge, separately, ordered Wilmington, Ohio to redo the ordinances behind a $4 billion Amazon Web Services campus after finding the city botched public notice.

The numbers

Commission staff’s March 16 draft report in 58484 proposed six changes. Three of them price large loads directly: eliminate interconnection cost allowances for large load customers, require them to pay a portion of system upgrade costs, and impose minimum demand charges tied to contracted peak demand for a period of 10 to 15 years. Staff also proposed replacing the four coincident peak allocation method with more peaks measured over longer intervals. Final rule amendments are due by December 31, 2026.

What’s next

The 10 to 15 year minimum demand charge is the term to underwrite, because it turns a contracted peak into a fixed obligation that outlives any single tenant. Watch the July 31 action, then ask the same question in every state on the shortlist, since Texas, PJM and TVA are now answering it differently. More national coverage.