Texas drops the per-megawatt interconnection fee for large loads
Victoria Shinder2 min readThe Public Utility Commission of Texas voted on Friday to adopt new large-load interconnection standards that are markedly softer than the rule it proposed in March. Utility Dive reported the decision on 21 September 2026.
The proposal had required a non-refundable interconnection fee of $50,000 per MW of contracted peak demand. The adopted rule eliminates it. Tiered study fees based on project size were also dropped in favour of a flat $100,000 study fee for all large-load customers, with the commission noting that it may amend the amount as more data on study costs becomes available.
The notification requirements were relaxed as well. Where the proposal said ERCOT must be told no less than 30 days after a milestone had been missed by six months, the final rule allows 24 months, and the commission clarified that the 24-month period applies to the energisation schedule as a whole rather than to each milestone individually.
The context is stated plainly in the reporting: the rules land during a pause on new data centre grid interconnections ordered by Governor Greg Abbott while the state audits ERCOT's 474 GW interconnection queue, roughly 90% of which is data centres. Law firm DLA Piper had said in March that the proposed rules could mean significant upfront capital commitments, with thresholds higher than those at other major US grid operators, where load study deposits and interconnection fees are usually measured in tens of thousands rather than millions.
What it means
A $50,000/MW non-refundable fee is a filter, and removing it removes the filter. Its purpose was to make speculative queue entries expensive — which is exactly the problem a 474 GW queue that is 90% data centres describes. Dropping it while auditing that queue is a decision to solve the speculation problem through the audit rather than through price.
The milestone change may matter more in practice. Going from notification after six months to a 24-month window applied to the whole schedule gives a project two years of holding capacity it is not using before anyone else learns it is available. For a planner trying to establish what the queue really represents, that is the number that determines how stale the picture is.