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Texas Regulators Move to Shield Home Electric Bills From Data Center Growth

Texas utility regulators and ERCOT outlined steps meant to keep households from paying for the power infrastructure that new data centers require, responding to a directive from Governor Abbott.

Jubal Vargas

July 26, 20262 min read

Energy regulation - illustration, Jake Team LLC
Energy regulation - illustration, Jake Team LLC

THE COLONY, Texas — Governor Greg Abbott on July 24 released a response from the Public Utility Commission of Texas and the Electric Reliability Council of Texas outlining steps the two bodies say will keep residential customers from absorbing the cost of the state's rapidly expanding data center industry.

The measures answer a June 10 directive in which Abbott told the commission to make data centers pay for the electric infrastructure they use, to ensure new connections do not raise household bills, and to work with ERCOT on further ratepayer safeguards. According to the governor's office, the agencies have begun putting those instructions into effect.

Among the actions listed, the commission said large data centers will be asked to help cover the cost of transmission upgrades built to serve them and to contribute toward lowering residential rates. Officials also described new rules meant to stop big data centers from pulling existing power off the ERCOT grid, a fresh screening step for grid connections, and a requirement that new facilities cut their power use quickly when ERCOT directs.

"Residential ratepayers will not foot the bill for this industry's growth. These actions keep electric bills affordable and protect the water our communities need." — Gov. Greg Abbott

The commission and ERCOT also urged lawmakers to act in the coming legislative session, including broadening the Lone Star Infrastructure Protection Act so that it applies to large data centers, spelling out the agencies' authority to set reliability rules, and having the facilities register with the state so regulators can monitor how much electricity and water they consume. Abbott said he would keep working with the Legislature to write the protections into law.

The Colony, a Denton County city along Lewisville Lake, sits between Frisco and Lewisville. The ERCOT grid supplies electricity to most of the state, so changes to how data centers connect and pay for power carry statewide implications for household bills.

Sources:

https://gov.texas.gov/news/post/governor-abbott-announces-puc-and-ercot-actions-protecting-residential-ratepayers-from-data-center-costs

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Jubal Vargas

Jubal Vargas writes about community life, schools, public safety, and local events in The Colony.

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