ERCOT runs the electric grid for most of Texas, and one of its jobs is saying when a large new customer may plug in and start pulling power. Governor Greg Abbott announced on August 3, 2026 that ERCOT and the Public Utility Commission of Texas must finish an audit of AI data center projects before any AI data center project moves forward. Any project that fails the requirements those two set will be denied a connection to the Texas grid. OK Energy Today The Public Utility Commission is the state agency that regulates electric utilities and oversees ERCOT, and I will call it the commission from here on. ERCOT put its main review of large new customers on hold the same day.
That review is called Batch Zero, and it is a one time sorting of every project of 75 megawatts or more waiting to connect. A megawatt is a unit of electric power, and a gigawatt is one thousand megawatts. ERCOT was supposed to tell the utilities that own the wires running to each site how it had classified each large load in the Batch Zero study by August 7, 2026. In a public notice dated August 3, it said the governor’s directive meant that notice would not go out on time. ERCOT market notice When the commission approved the Batch Zero framework in June, ERCOT said it was tracking more than 438,000 megawatts of large customer requests. Close to 89 percent of that was tied to AI data centers. Microgrid Media
ERCOT is withholding permission to switch on
ERCOT told the commission on August 10 that it will not grant any further approvals to energize a large load AI data center or a crypto mining site until the verification is finished. ERCOT filing ERCOT has said it will refrain from granting further approvals to energize any Large Load AI data centers or virtual currency mining facilities until the verification is complete. There is no fixed deadline for the audit, and ERCOT has told regulators it could run several months. Capacity The commission’s August 14 session was an emergency meeting, its first public meeting since the governor’s order.
ERCOT officials said at that meeting that the audit covers roughly 250 to 300 projects, most of them AI data centers, with a handful of traditional large users such as a factory. The Texas Tribune Those projects add up to about 200 gigawatts of future demand, which is more than twice ERCOT’s recent peak demand record. Microgrid Media
What a project has to prove now
Under the plan ERCOT described to state senators on July 29, only a sample of applicants would have to back up their claims. A project that could not show it qualified would be dropped from Batch Zero. ERCOT Senate presentation The proof travels through the utility that would connect the site rather than going straight to ERCOT. ERCOT picks a sample set of projects for verification review in Batch Zero. For those projects, it requires documentation such as purchase orders for equipment with long delivery times, real estate agreements and land use approvals, agreements with end users, and construction agreements. Every project in the batch now has to clear that check before ERCOT sorts any of them. ERCOT general counsel Chad Seely told the commissioners on August 14 that the governor’s letter moves verification to the front of the line, ahead of the study. The Texas Tribune
The file that a developer could have assembled quietly during the study raises questions about when the documentation has to exist and how many applicants it has to cover.
Batch Zero large load review before and after the August 3 directive
| What changed | Before | After |
|---|---|---|
| Eligibility verification | Sample set of applicants, checked during the study, any time through April 9, 2027 | All Batch Zero large loads verified before ERCOT classifies any of them |
| Classification notice | Due to interconnecting DSPs and TSPs on or before August 7, 2026 | Not issued. ERCOT seeks a good cause exception to that deadline |
| Energization approvals | Granted as individual projects qualified | Withheld for large load AI data centers and virtual currency mining facilities until verification completes |
| Information demanded | Attestations, qualifying studies, dynamic model data, financial security | Adds water and cooling, ownership, tax breaks, financial self-sufficiency and community impact |
| Who must report | Batch Zero covers large loads of 75 MW or more | Community impact request reaches unenergized AI data centers and mining facilities of 25 MW or more |
| Quarterly stability assessment entry | Load must qualify as base load under Planning Guide 9.2.1.1(1) | ERCOT asks to admit unclassified loads energizing in first or second quarter 2027 |
The 25 megawatt request reaches sites that were never in Batch Zero
ERCOT also told the commission it will ask for community impact information from every AI data center and crypto mining facility of 25 megawatts or more that has not yet switched on. ERCOT filing Batch Zero only reaches projects of 75 megawatts or more, so this second request pulls in smaller sites that were never in the batch at all. The questions cover water use and cooling, who owns and controls the company, where the power comes from, and whether it can pay its own way.
Texas has asked some of this before. A joint survey from the commission and the Texas Water Development Board went to 377 companies and drew 28 responses. The Compute Wire Fewer than one in thirteen companies answered, and the audit now requires water consumption and cooling technology data before a project can connect to the grid. Cipher Digital says it will cut its power use when ERCOT declares a grid emergency and pays its own connection costs. The company also says it cools with treated brackish water that nobody drinks and has already filed answers to the commission’s water survey for its Texas sites. ScanX News
The commission has already made one AI data center prove it can shut itself off fast. It approved an arrangement for a 260 megawatt AI data center built next to a wind farm of roughly the same size. It also required the site to cut its entire load within 30 minutes during a grid emergency, physically opening a breaker if that is what it takes. The Compute Wire That order also bars the site from programs that pay customers to reduce their use. The 30 minute figure comes from the Public Utility Commission of Texas approval of a single 260 MW co located AI data center project.
Can ERCOT skip its own deadlines?
ERCOT asked the commission on August 10 for good cause exceptions under a commission rule numbered 16 Texas Administrative Code 25.3(b). Those exceptions would let it depart from Sections 5 and 9 of its planning guide, the rule book that sets the Batch Zero deadlines. ERCOT filing A good cause exception is permission from the commission, requested under 16 TAC § 25.3(b), to not follow a rule that would otherwise apply. ERCOT flagged the request in advance, saying on August 3 that it would file before the commission’s August 20 open meeting. ERCOT market notice Chief operating officer Woody Rickerson and Seely briefed the commissioners on the new Batch Zero plan. ERCOT says it will need to file good cause exceptions with the PUC in response to the governor’s request. RTO Insider
The commission’s own index of its electric rules lists Section 25.3 under the title Severability Clause with an effective date of March 12, 2003. The index links to the rule text rather than printing any of it. PUCT rules index A developer consulting that index finds the Chapter 25 rules listed in a table with a rule number, a description column, and an effective date.
The dispute clock cannot start until ERCOT sorts the projects
A project moved out of base load, the top group in the sorting, gets three business days to object, and it objects through its connecting utility rather than to ERCOT directly. The whole sequence runs up to 17 business days. That covers 2 for the utility to pass on the news, 3 to dispute, 3 to resolve, and 7 to post enough extra financial security to reach 50,000 dollars per megawatt. ERCOT Senate presentation That brings required security to 50,000 dollars per megawatt, with any shortfall due within 7 business days. That whole dispute chain starts when the sorting notice arrives. The notice was due no later than August 7, and it has not gone out. That means a developer cannot yet bring the optional dispute over a reclassification.
What this does to a 2027 schedule
Seely said ERCOT is still aiming to finish the first batch study by its original April deadline. The Texas Tribune ERCOT has moved the verification audit ahead of the interconnection study, and the audit is expected to take several months. Oncor is working out what the freeze means for a pipeline of nearly 300 gigawatts of load, and executives at its parent company Sempra said they support the pause on new approvals. Utility Dive Every lease start date, equipment delivery slot and loan draw that was keyed to switching on in 2027 now depends on a review with no end date on it.
CenterPoint says about 14 gigawatts on its system is likely eligible for Batch Zero, and Constellation told investors it expects the process to resume without meaningful delay. Utility Dive The schedule ERCOT gave senators in July had the study starting no later than September 2, 2026. Applicants had to send back corrected computer model data by August 31, and ERCOT granted no extensions. ERCOT Senate presentation August 31 is one week from today. I would keep working to that date until ERCOT publishes a different one, because the penalty it described for missing it is removal from Batch Zero.
Tomorrow’s topic
Pennsylvania’s executive order on data center permitting and power.