Senate Bill 6 & Upcoming Changes to Texas Electric Regulations: What Data Centers and Large Power Users Need to Know

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Texas has become a hub for manufacturing and data center development due to its favorable business environment and low energy costs. However, the state's electric grid is under pressure from increasing demand, particularly from data centers and crypto mining. In response, the Texas Legislature passed Senate Bill 6 (SB 6) on May 29, 2025, which introduces new regulations for the planning and operation of large electrical loads in the ERCOT region. This legislation aims to ensure grid reliability while accommodating economic growth, making it essential for stakeholders in the data center and industrial sectors to understand its implications.

SB 6 mandates the Public Utility Commission of Texas to establish cost-sharing and interconnection standards for large load customers, defined as those exceeding 75 MW. Key provisions include requirements for large loads to disclose their interconnection requests, provide information on on-site backup generation, and adhere to new financial commitments for transmission studies. Additionally, utilities must develop protocols for managing demand during emergencies. These changes signal a significant shift in how large power users will interact with the Texas grid, necessitating careful attention from developers, investors, and energy providers regarding regulatory compliance and operational strategies.