The Texas Public Utility Commission on Thursday unanimously approved rules requiring large computational loads like data centers and cryptocurrency mining facilities within the Electric Reliability Council of Texas footprint to remain stable and connected to the grid through disruptions. The new "ride-through" requirements address a growing reliability problem: when hundreds or thousands of megawatts of computational load simultaneously disconnect during voltage or frequency disturbances, the grid experiences a sudden, massive loss of demand that threatens stability across the system.
ERCOT has experienced 28 events involving large computational load trips of at least 100 megawatts due to voltage and frequency excursions since the beginning of 2023, according to official comments from ERCOT. Developers have requested studies for more than 438 gigawatts of large load projects within ERCOT's footprint. The Texas Blockchain Council estimated in comments that proposed mitigation approaches like dedicated battery storage would cost more than $1.6 million per megawatt, making such solutions economically prohibitive for most operations.
The rules don't immediately penalize facilities that fail to ride through a qualifying event, according to analysis from Kenteel Engineering. Instead, they put facilities "on the clock" to investigate and report the root cause within 90 days of ERCOT's request, develop a corrective plan within 90 days of completing that investigation, and implement the approved plan within 180 days unless ERCOT grants more time. ERCOT staff wrote in a market impact statement that the rules provide "necessary requirements to reduce the reliability risk posed by LCLs unexpectedly tripping or transferring to backup generation." If ERCOT judges that continued operation poses an imminent risk to local or system reliability, it can order the facility offline and keep it disconnected until the customer demonstrates compliance.
Modern computational loads are engineered to protect extremely sensitive and expensive equipment, and during a voltage dip are programmed to disconnect or enter momentary cessation, Kenteel Engineering explained in a June blog. This protective behavior creates cascading problems when facilities disconnect en masse during the same grid disturbance. The Texas PUC rules state that "as LCLs increase on the ERCOT System, similar events would be expected to increase in magnitude and frequency, leading to frequency instability and other reliability problems absent frequency and voltage ride-through requirements." ERCOT warned that even if only a small fraction of the 438 gigawatts of requested projects materialize, this will significantly increase the risk that cascading outages could occur due to large computational load failures to ride through typical voltage or frequency disturbances.
Industry groups challenged the commission's authority to impose the rules. The Data Center Coalition argued that the PUC lacks the statutory authority to impose binding operational requirements directly on retail customers, a category the Legislature deliberately excluded from ERCOT's authority. Texas Industrial Energy Consumers wrote that unlike market participants who must agree to comply with ERCOT protocols as a condition of participating in the wholesale market, pure retail loads have made no such commitment. R. Floyd Walker, senior counsel with the commission's market analysis division, dismissed these concerns in a staff memo, writing that "delegated authority is sufficient" and that there's no debate that voltage and frequency excursions on the transmission network create reliability concerns that increase with each new large computational load. The rules take effect with the commission's approval, giving ERCOT authority to enforce ride-through standards on facilities that would otherwise remain outside its regulatory reach.