Texas Approves AI Data Center With Mandatory Grid Curtailment

The Public Utility Commission of Texas approved a net metering arrangement on July 24, 2026, for a 260-MW AI data center co-located with a wind farm of equal capacity. The ruling establishes strict reliability mandates, requiring the data center to be capable of curtailing its entire load within 30 minutes during grid emergencies, including the use of physical breaker disconnection if necessary.

Developer Crusoe and customer Ensign contested these requirements, arguing that the mandate to shut down the entire site was disproportionate. Despite these objections, the commission prohibited the project from participating in paid demand response programs. This distinction separates voluntary grid services from mandatory reliability requirements designed to protect the broader electrical system.

The decision represents one of the first major applications of Senate Bill 6. This legislation grants the Electric Reliability Council of Texas the authority to disconnect large loads during crises to maintain grid stability. The commission's ruling aligns the project's operational requirements with the grid operator's reliability conditions.