# ERCOT The Electric Reliability Council of Texas — the grid operator for roughly 90% of Texas electric load. Functionally a [[Regional Transmission Organization]], but with one decisive structural difference: **ERCOT is deliberately not synchronously interconnected with the rest of the country**, which keeps it outside the interstate commerce hook and therefore largely outside [[Federal Energy Regulatory Commission]] jurisdiction. Texas is regulated instead by the Public Utility Commission of Texas and the legislature. That arrangement was a choice, maintained for decades precisely to avoid federal oversight. It is the purest available example of jurisdiction as a policy instrument: the same physical facts produce different law depending on whether a wire crosses a state line. > [!note] What the isolation buys and costs > ERCOT has no [[Capacity Market]]. It is an energy-only market: generators earn from energy and ancillary services, with scarcity pricing meant to signal investment. Advocates argue this is more efficient than paying for capacity that may never run. Critics point to February 2021, when the isolated grid could not import at scale during Winter Storm Uri. The design also makes ERCOT the fastest place in America to connect a large load — which is why the data centers went there. ## The queue ERCOT's large-load interconnection queue is the largest in the country by a wide margin: roughly **1,800 large-load requests totaling about 474 GW**, of which approximately **90% is attributable to data centers.** For scale, ERCOT's all-time peak demand is a small fraction of that number. The queue is a register of announcements, not of projects — see [[Interconnection Queue]] for why the two diverge so sharply. ## Senate Bill 6 (2025) Signed by Governor [[Greg Abbott]] on 2025-06-21 with immediate effect, SB 6 built a large-load regime years before FERC acted in the RTO regions: - Applies to large loads of **75 MW or more**, unless the PUC sets a lower threshold. - Grants ERCOT authority to direct curtailment or to require deployment of on-site backup generation during or ahead of emergency alerts, after other market services are exhausted. - Requires disclosure to ERCOT and utilities of any on-site backup generation capable of covering 50% or more of site demand. - Requires **remote disconnect capability** for large loads connecting after 2025-12-31. - Directs ERCOT to develop a competitive demand-reduction procurement program. The remote-disconnect requirement is the sharpest provision in American large-load law: the grid operator gets a switch. ## The August 2026 audit On **2026-08-03** Abbott directed the PUC of Texas and ERCOT to conduct a comprehensive verification and audit of every data center advancing through the interconnection process, including disclosure of state and local financial assistance received and the extent of on-site generation versus grid dependence. Projects failing the audit are to be denied connection. ERCOT announced the same day that it would not meet its August 7 deadline for the next phase of interconnection studies and sought a good-cause exception. The queue is effectively paused pending completion. The politics here are worth noting precisely, because they cut against the expected alignment: a Republican governor of the most energy-identified state in the country, whose administration has courted data-center investment, ordered the industry's queue frozen and its subsidies disclosed. The pressure is coming from constituents' bills and from local siting fights, not from an environmental coalition. ## Why ERCOT is the control case Because ERCOT sits outside the federal regime, it functions as a natural experiment. It has no capacity market, so it cannot produce PJM's capacity-price shock; it has statutory curtailment authority that PJM had to design from scratch; and it reached the "audit the queue" stage before any FERC-jurisdictional region. Comparing ERCOT and [[PJM Interconnection]] separates what is caused by AI load growth from what is caused by a specific market design. ## See Also - [[PJM Interconnection]] — the FERC-jurisdictional comparison case - [[Regional Transmission Organization]] — the general form ERCOT deviates from - [[Interconnection Queue]] — why 474 GW is not a forecast - [[Large Load Tariff]] — the instrument other states are now copying