Post: PUCT and FERC set out processes for data center connections

PUCT and FERC set out processes for data center connections

The Public Utility Commission of Texas (PUCT) has approved changes to the ERCOT process for evaluating requests from data centers and other large power users seeking to connect to the Texas grid.

The new process, approved on June 18^th, aims to more effectively manages the rapid growth in grid interconnection requests while ensuring electric reliability for Texas homes and businesses. Using the new “Batch Study” process, ERCOT will group projects together to speed up the evaluation process, separate out speculative projects, and identify what new transmission infrastructure may be required. The study will prioritize projects that are further along in the development process and require large energy users to post a financial security equal to $50,000 per megawatt of the proposed project to be included. ERCOT says it will notify applicants for the first study in August. The approved revisions to the interconnection process will take effect later this summer.

Separately the Federal Energy Regulatory Commission (FERC) issued tailored show cause orders under section 206 of the Federal Power Act to each of the six regional grid operators under its jurisdiction, directing them to justify or reform the rules that govern how data centers, manufacturing facilities, and other large energy users connect to the electric grid.

Under the orders, each RTO/ISO, and its transmission owners have 60 days to either justify why their current tariffs remain just and reasonable without provisions tailored to large loads, or to file tariff changes that address the issues the Commission identified. Each order tees up five categories of reform for the grid operators to address:

• developing efficient transmission service application and study processes, including consideration of alternative transmission technologies
• preventing cost shifting and requiring transparency into transmission costs
• accommodating co-location agreements and behind-the-meter generation
• providing new transmission services for flexible large loads
• developing a process to study generating facilities that serve electrically proximate large loads and co-located loads

Additionally, within 30 days, each grid operator and its transmission owners must submit a detailed informational report describing how the grid operator intends to ensure that adequate generation will be available to serve existing and new large loads.

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