Amid growing electric demand, Texas lawmakers are working on legislation that would increase regulations on large electric consumers, including data centers.
At a glance
Demand on Texas’ power grid reached a record 85,508 megawatts in August 2023, and the Electric Reliability Council of Texas has estimated it will grow to about 150,000 megawatts by 2030. Lawmakers have said large data centers and industrial projects could cause significant strain to the grid unless changes are made.
“We have single customers coming to Texas with an electric demand that surpasses the size of cities’ needs,” Rep. Ken King, R-Canadian, said during a May 7 hearing of the House State Affairs Committee. “Within the next few years, the entire [Rio Grande] Valley has an electrical peak demand of three gigawatts. Stargate in Abilene has electric demand projected to be twice that in 2030.”
To address these challenges, legislators are considering Senate Bill 6, a wide-ranging measure that proponents say would strengthen the power grid, boost accountability for large consumers and better protect residential customers from outages. Critics said SB 6 could negatively affect public safety and hinder new economic development in Texas.
“We're talking about the future of the economy. ... Our economy is so deeply tied to our energy systems that it's not hyperbolic to say the future of the state's economy hinges on some of these decisions,” Austin-based energy consultant Doug Lewin told Community Impact.
State senators passed SB 6 unanimously in March. After two hours of discussion on May 8, the House State Affairs Committee left the bill pending. Ken King, who is sponsoring SB 6, said he would propose an amended version of the bill during a future committee meeting.
What you need to know
One of the primary goals of SB 6 is to rework how Texas handles power grid emergencies. During a Senate committee hearing in February, bill author Sen. Phil King, R-Weatherford, said utility providers need more flexibility to manage “non-critical” large loads during extreme conditions.
To prevent a systemwide blackout in an emergency, ERCOT uses a process called “load-shedding,” which involves directing transmission companies to temporarily disconnect some customers, according to agency documents. Phil King said smaller customers, including residences, sometimes lose power first in these situations.
“Remember, during [Winter Storm] Uri, no one died at the office building and no one died at the manufacturing plant,” he said on Feb. 27. “They all froze to death in their homes in 2021 and that will never happen again. It cannot.”
During emergencies when load-shedding is necessary, SB 6 would require customers that use at least 75 megawatts of power, such as data centers, to switch to backup generators to reduce strain on the grid. Large customers would also need to install equipment allowing the state to remotely disconnect power from their facilities, known as a “kill switch” provision.
