Ending the "Stupid Land" Queue: ERCOT's New Rules for Massive Power Loads
The Electric Reliability Council of Texas (ERCOTs) has 438,000 MW of large loads seeking interconnection to the grid.
There are many speculative projects, as well as significant global supply chain limits, so many won’t materialize.
ERCOT planners have been struggling to address these volumes, but new – mainly data center - applications have come in so quickly that planners have been overwhelmed.
Til now, utilities conducted individual studies, later reviewed by ERCOT, to evaluate impacts on power flows and need for transmission upgrades. With so many applicants arriving, study outcomes kept morphing, requiring follow-on evaluations led to growing backlogs.
So, in March ERCOT developed a batch planning process, assigning projects over 75 MW to a group, and evaluating the system impacts of the aggregation. Stricter eligibility criteria require stronger proof of project maturity and financial strength.
The goal is to speed up the process, making it more efficient, transparent, and equitable, and weed out weaker speculative projects that drain scarce planning resources.
ERCOT’s board voted to proceed, with the first study to be called “Batch Zero.” A Public Utility Commission of Texas confirmation vote is scheduled for June 18.
If approved, Batch Zero will kick off a continuous batch study process for future large loads, similar to the “cluster” interconnection approach for new supply assets in power markets.
To join Batch Zero, developers must submit project information to their utility by July 10th, confirming control of sites – with lease or ownership of property - while also disclosing any additional interconnection requests in ERCOT or elsewhere – to avoided double-counting. They will also have to show regulatory approvals and anticipated engineering services, while posting a $50,000 deposit per MW of new load.
By January 29, 2027 ERCOT will publish the Batch Zero Interconnection Study, including annual capacity allocations to each applicant through 2032, suggested transmission improvements, and related Contribution In Aid of Construction (CIAC)costs to be paid for these upgrades.
By March 1, the interconnecting large load entities must formally accept their capacity allocations.
By June, ERCOT will deliver an iterative refinement study, finalizing exact transmission facility improvements and cost estimates required for the committed load.
Then developers will sign interconnection agreements with the transmission and distribution utilities and pay a non-refundable interconnection fee of $50,000/MW. Large loads will also have to cover all direct CIAC costs so that other ratepayers are not affected. And utilities cannot start any infrastructure upgrade work until the CIAC is paid.
These stringent Batch Approach requirements should help weed out speculative phantom loads and tell us a lot – both in ERCOT and perhaps extrapolated more nationally – about which loads are real and which are speculative.
The process may also provide some valuable lessons to other utilities and grid operators – all of whom, having never seen loads of this magnitude or with such urgency to rapidly connect - are pretty much making this up as they go along.