Texas Orders AI Data Center to Fully Curtail for Grid Emergencies
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- Public Utility Commission of Texas approved a net metering arrangement for a 260-MW AI data center co-located with a similarly sized wind farm, allowing the project to proceed under new reliability conditions.
- Public Utility Commission of Texas rejected the developer’s argument that the second data center should avoid curtailment requirements, ruling that combined load exceeds on-site generation and must be fully curtable.
- ERCOT must be able to disconnect the data center within 30 minutes during grid emergencies, with physical breaker disconnection required if needed, according to the July 23 order.
- Crusoe and Ensign argued that full curtailment was disproportionate, but commissioners sided with ERCOT’s proposal, emphasizing grid reliability over project-specific exceptions.
- Chris Talley noted the decision isn’t a 'death blow' to co-location but means such projects now require full backup capacity to operate off-grid for meaningful periods.
- Texas Competitive Power Advocates and BKV warned the framework could discourage future co-location, though the commission did not address their filings, citing lack of standing.
Why it matters: The ruling makes co-located data centers in Texas riskier without full backup generation, raising costs for developers like Crusoe while reinforcing ERCOT’s authority over large loads. The precedent could shape how Amazon and Vistra’s nuclear-powered data center proposal is treated next.
