Texas Law Mandates Data Center Curtailment to Ensure Grid Reliability

Facing a potential threat to grid reliability from the explosive growth of data centers in Texas, Governor Abbott signed SB 6 into law. The bill establishes mandatory and voluntary demand response programs, requiring large data centers (75 MW and above) to curtail electricity consumption during grid emergencies or switch to backup generation. New interconnection disclosure and cost-sharing rules, along with protocols for co-locating large loads with existing generators, are also included. This aims to balance data center growth with grid stability, preventing a repeat of the 2021 Winter Storm Uri crisis and providing regulatory certainty for independent power producers and data centers seeking colocation arrangements.