Unpacking Texas' New Grid Reliability Rules For Data Centers

Originally published by Law360

Texas utilities and large load customers are entering a new phase of reliability regulation as the Electric Reliability Council of Texas implements mandatory ride-through requirements for large computational loads, including data centers and cryptocurrency mining facilities.

Effective Aug. 1, the new standards respond to a growing reliability concern: how the simultaneous loss of large amounts of load during routine voltage or frequency disturbances can threaten grid stability as more large power electronic intensive loads connect to the ERCOT system. For utilities and developers of large computational loads, the requirements introduce important new considerations for interconnection, facility design, protection settings, modeling and ongoing compliance.

This article examines why ERCOT adopted the new standards, which facilities are covered, and what technical and compliance obligations they impose, along with some unresolved questions surrounding the authority of ERCOT and the Public Utility Commission of Texas to directly regulate these large load retail customers.

Background

It has been established in ERCOT that if multiple large computational loads, or LCLs, such as data centers or crypto-mining, simultaneously trip offline during a common system disturbance, this creates reliability risks, potentially resulting in frequency and voltage instability.

This issue has been recognized in other parts of the country as well, catching the attention of the North American Electric Reliability Corp., which issued an initial alert in September 2025 and a more urgent higher-level alert this May regarding these reliability risks. In July, the Federal Energy Regulatory Commission ordered NERC to develop new or modified mandatory reliability standards for integrating computational loads in the bulk power system.[1]

In ERCOT, there have been 28 incidents between January 2023 and June 2026 where the system lost between 100 and 450 megawatts of LCLs.[2] As more large loads connect to the system, ERCOT believes such events are likely to become more frequent and severe, creating even greater risks for frequency stability, voltage recovery, and overall system performance.

ERCOT Addresses the Risks; PUCT Approves the Fix

ERCOT has stated that transmission and market improvements alone are not enough to adequately address the risk of cascading outages resulting from multiple large loads failing to ride through typical voltage or frequency disturbances.[3] Therefore, in November of last year it proposed Nodal Operating Guide Revision Request 282, which is intended to prevent LCLs from tripping or rapidly reducing consumption during temporary voltage or frequency fluctuations.

ERCOT sought and obtained designation of NOGRR 282 by the ERCOT board of directors as a board priority, underscoring its view that addressing the risks is urgent. After significant shareholder comment and some refinement by ERCOT based on that feedback, NOGRR 282 was adopted by the board on June 2 and approved by the Public Utility Commission of Texas on July 9 to be effective Aug. 1.

These provisions apply to facilities at a single site with an aggregate peak demand of at least 75 MW behind one or more common points of interconnection, or service delivery points where at least 50% of the demand consists of power electronic-based load, specifically computational load, such as data centers and cryptocurrency mining facilities.[4]

The new requirements apply to both voltage and frequency ride-through scenarios. To verify that computational loads can comply with these new ride-through requirements, ERCOT implemented detailed dynamic modeling requirements, which are currently still pending in its revision process.[5]

There are limited exemptions to these new requirements for legacy LCLs; existing projects that either (a) received approval to energize by Nov. 14, 2025, or (b) completed large load interconnection studies and interconnection agreements with transmission and distribution service providers before Nov. 14, 2025, are not required to comply with NOGRR 282.

Specific Technical Requirements of NOGRR 282

NOGRR 282 implements technical criteria intended to keep nonexempt LCLs electrically connected to the ERCOT system through specified disturbances. For frequency ride-through, there are designated minimum times the load must remain connected and consuming based on the frequency scenario.

NOGRR 282 also includes performance conditions based on whether the load is drawing current at the time of the disturbance.[7]

For voltage ride-through, there are also minimum ride-through times as well as specific recovery requirements. Stricter voltage ride-through standards take effect for projects that complete interconnection studies approved by ERCOT and execute interconnection agreements after Jan. 1, 2028; projects interconnecting after that date are expected to deploy more capable, grid-friendly power-electronic designs.

The new ride-through requirements are applicable at the service delivery point, or the point of interconnection bus if the load is co-located with a generation resource — so at the interconnection to the grid, as opposed to the server racks where the power electronic interface sits.

Debates on PUCT's Authority

Arguably conflicting provisions in the Texas Public Utility Regulatory Act, or PURA, create a question about whether PUCT or ERCOT had authority to impose the requirements in NOGRR 282 directly on retail customers.

Texas Industrial Energy Consumers, the Data Center Coalition, the Texas Blockchain Council and other parties filed comments expressly challenging that authority, claiming that PURA 39.151(j) sets a clear boundary between the registered market participants that ERCOT may regulate and the retail customers that merely seek service from transmission providers in the system.

ERCOT filed its own comments contending that its obligation under PURA 39.151(a) "to ensure reliability and adequacy of the regional electric network" is a broad mandate that extends to regulation of retail customers if their behavior could adversely affect reliability. Specifically, ERCOT argued that:

• PURA 39.151(j) does not explicitly prohibit regulation of retail customers; and
• PURA 39.151(l) appears to support ERCOT's position, as it prohibits requirements that "adversely affect or impede any manufacturing or other internal process operation associated with an industrial generation facility, except to the minimum extent necessary to assure reliability of the transmission network."
  
  

PUCT approved NOGRR 282 without taking up or discussing the legal challenges made by the various stakeholders. It remains to be seen whether any party will pursue judicial review of the PUCT's decision.

Practical Impacts

LCLs will have to assess their protection settings, backup-power configurations, design and equipment specifications, and operating protocols to ensure they can remain connected during voltage or frequency disturbances in accordance with the new requirements. The overarching difficulty for facility designers and engineers will be to develop equipment and protection schemes that will recognize internal faults as different from an external disturbance, which must be ridden through to protect the system at large.

If an LCL fails to ride through a qualifying event in accordance with the new requirements, the load's transmission and distribution service provider will report the event details to ERCOT. The LCL will then have 90 days to:

• Investigate and report the root cause to ERCOT;
• Develop a corrective plan within 90 days of completing that investigation; and
• Implement the approved plan within 180 days unless ERCOT grants more time.
  
  

Most significantly, if ERCOT determines that an LCL's continued operation poses an imminent risk to local or system reliability, it can order the load disconnected — and keep it disconnected — until the LCL demonstrates compliance with NOGRR 282 requirements to ERCOT's satisfaction.

Practically, the new requirements established by NOGRR 282 will affect how ERCOT and transmission and distribution service providers will structure interconnection studies for new LCLs going forward. Dynamic stability, frequency response, protection coordination and real-time operational visibility may take on greater importance.

Besides interconnection studies, these new requirements will affect compliance planning, facility design, equipment procurement, commissioning and project financing models. New data center and crypto-mining projects should also be prepared to reconfigure dynamic modeling data in preparation for implementation of the new dynamic modeling requirements under Planning Guide Revision Request 144.

[1] Order Directing the North American Electric Reliability Corporation to File Reliability Standard(s) Pertaining to Computational Load Integration, Docket No. RD26-7-000 (July 16, 2026).

[2] Jeff Billo and Nathan Bigbee, Item 15.1.1.3: ERCOT Comments on NOGRR282 and NPRR1308, ERCOT (June 1-2, 2026), https://www.ercot.com/files/docs/2026/05/22/15.1.1.3-ERCOT-Comments-on-NOGRR282-and-NPRR1308.pdf.

[3] Id.; see also ERCOT Comments Regarding NOGRR 282, Project No. 54445 (Jun. 12, 2026) at 2-3.

[4] NPRR 1308, Definition of Large Computational Load.

[5] PGRR 144, Dynamic Model Submission and Review Requirements for Large Loads including Large Computational Loads.

[6] PG 2.6.4(3), Table A.

[7] PG 2.6.4.