Texas Drops a $50,000 per MW Interconnection Fee From Its Final Data Center Rules During Its Own Queue Pause

The Public Utility Commission of Texas voted in September 2026 to adopt large load interconnection standards for the ERCOT region. They cost data center developers less than the draft did. The commission eliminated a proposed non-refundable interconnection fee of $50,000 per MW of contracted peak demand. The adopted rule sets the financial security a customer posts with its interconnecting utility at $50,000 per MW of requested peak demand. The rules apply to loads with peak demand over 75 MW in the ERCOT region.

Both changes cut what a developer fronts for a queue position. The part that was never coming back is the part that disappeared. The deposit is refundable. The interconnection fee was not.

What else moved

The proposed rule set study fees in tiers based on project size. The adopted rule replaced those tiers with a flat $100,000 study fee for every large load customer. The commission said it would revisit that number as it collects data on what the studies actually cost.

Missed construction deadlines got a longer leash. Under the draft, a utility had to notify ERCOT no less than 30 days after a customer missed an energization milestone by six months. The final rule stretches that to 24 months. The commission also clarified that the 24-month period applies to the energization schedule as a whole rather than to each milestone separately.

The refund terms improved for departing customers. The draft returned only 20 percent of the financial security to the customer. It applied the remaining 80 percent to outstanding amounts owed. What was left became an offset to the transmission provider’s rate base. The adopted rule applies the security to outstanding amounts and returns the balance.

Why It Matters

The timing is the story. Texas is in a pause on new data center development. The state is auditing an ERCOT interconnection queue that holds 474 GW and is roughly 90 percent data centers. That queue is the evidence that a cheap request has no cost to file. The commission’s answer was to make the request cheaper.

Senate Bill 6 told the commission to write these standards to support business development while minimizing stranded infrastructure costs. Those two instructions pull against each other, and the deposit is where the tension lands. A higher deposit filters speculative filings and deters real ones. A lower deposit does neither. In March, the law firm DLA Piper wrote that the proposed rules could require significant upfront capital commitments. It said the thresholds sat above those of other major US grid operators. The adopted rule answers that complaint. Whether it also answers the queue is a different question. The audit will settle that before the rule does.

Critical Perspective

The milestone change deserves more scrutiny than the deposit cut. Under the draft rule, a utility told ERCOT within 30 days once a customer was six months late. The adopted rule waits 24 months, and applies that window to the whole energization schedule rather than to each milestone. A project holding allocated capacity now sits two years behind schedule before the grid operator is formally notified.

That is the same capacity the state is auditing the queue to free up. The commission cut the price of holding a position and extended how long a stalled project keeps one, in the same order, during a pause called because too many positions are held. Senate Bill 6 asked for standards that minimize stranded infrastructure costs. It is not obvious which provision here does that work.

The counterargument is real. A deposit high enough to deter a speculative filing also deters a genuine developer with a long financing timeline, and Texas competes for these projects. The commission chose growth over filtering. That is a defensible call, but it is a call, and the audit will produce the number that judges it.

Sources

• Utility Dive: Texas PUC adopts softened rules on data center interconnection (September 21, 2026)
• San Antonio Express-News: New Texas rules require data centers to put money down when seeking grid access (September 21, 2026)
• Public Utility Commission of Texas: Project 58481, Large Load Interconnection Standards

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