What Texas SB 6 actually does.

Texas has always been a favored destination for new data center capacity. The combination of competitive wholesale power, no state income tax, relatively fast permitting, and strong transmission infrastructure made Texas the clear default for many operators. By late 2024, ERCOT's large-load queue had ballooned to proportions nobody planned for — Kristi Hobbs, ERCOT's VP of System Planning, publicly stated in 2025 that 'we have outgrown the process that was established for reviewing these large loads.' ERCOT contracted McKinsey to help redesign the workflow.

Meanwhile, the Texas Legislature passed Senate Bill 6 in 2025. The bill directed the PUCT to establish interconnection standards for loads over 75 MW, with a focus on reliability, self-curtailment, and cost allocation. SB 6 was narrow in scope — it told the PUCT to act but didn't prescribe the specific rules. The PUCT's job was to write 16 TAC §25.194, the actual operational framework.

On March 12, 2026, the PUCT published the draft rule in docket 58481. The comment round opens April 3 and closes April 17. This is the window in which developers, utilities, and stakeholders shape the final rule — and it is the window that operators with active Texas projects must act in.

The draft §25.194 applies to loads over 75 MW connecting to the ERCOT transmission system. It introduces several new concepts into the Texas interconnection workflow.

First, the readiness gates. Projects must demonstrate site control, financial readiness, and a credible commercial operation date before advancing through the cluster study. This is the Texas equivalent of the stricter readiness gates that FERC Order 2023 introduced for generation interconnection. Speculative filings become much harder — which is the explicit intent.

Second, self-curtailment commitment. Projects must commit to a baseline ability to curtail load during grid stress events, expressed as a percentage of contracted demand. The draft sets the floor at a specific range but leaves the actual commitment negotiated per project. In practice, most projects will be asked to commit between 10% and 25% self-curtailment capacity; the exact number depends on POI characteristics and the project's load profile.

Third, cost allocation rules. The draft clarifies how upgrade costs are allocated across projects within a cluster, with specific language about how co-located generation and load interact. This is the part that most affects operators planning behind-the-meter or hybrid arrangements.

Fourth, study process rules. The draft formalizes how ERCOT runs the large-load study, including timelines, deliverables, and the interaction with the new Batch Study framework ERCOT filed separately. The two pieces — the PUCT rule and the ERCOT Batch Study framework — have to work together, and projects filing now need to understand both.

ERCOT's Batch Study framework is the operational mechanism that complements the PUCT rule. Under the framework, qualifying large loads are grouped into scheduled batch windows with coordinated study timelines. Projects that meet the eligibility criteria enter the next batch; projects that do not wait for a future window or fall back to the legacy full-study path.

The framework was filed for the ERCOT Open Meeting on February 20, 2026. It introduces tighter financial commitments upfront, compressed study timelines, and a mechanism for cost allocation across batch participants. The trade-off is clear: faster study completion for projects that qualify, but with stricter entry requirements.

Our read of the framework: it advantages projects with site control, realistic COD assumptions, and existing power infrastructure (including coal conversions, brownfield sites, and existing industrial facilities). It disadvantages speculative projects that filed early in 2024 without site control or financial readiness — and those projects were a meaningful share of the queue growth.

The combined effect of the PUCT rule and the Batch Study framework is that ERCOT's queue will shrink. Speculative projects will withdraw. Serious projects will find a clearer path. The exact scale of the shrink is hard to predict but we expect 30–50% of current queue requests to withdraw or fail readiness gates over the next 12 months.

If you have an active Texas project under the legacy framework, you are operating in a transition period. The draft rule, once finalized, applies to new requests and will likely reshape how ERCOT handles projects already in the queue. You need to monitor the rulemaking closely and be prepared to adjust your filing as the final rule emerges.

For new projects targeting Texas in 2026 or 2027, start by screening against SB 6 eligibility. The 75 MW threshold is firm; projects under that fall into a different (and faster) workflow. Projects above the threshold need to plan for the Batch Study framework, the readiness gates, and the self-curtailment commitment.

The self-curtailment commitment is the single most negotiable element. A project that can credibly commit to 25% curtailment under grid stress conditions will see dramatically better terms than one committing to 10%. This is where engineering analysis matters most — the load profile, the backup generation capacity, and the operational flexibility all feed into the negotiation.

Cost allocation in the Batch Study framework creates interesting opportunities for projects that can bring complementary characteristics. A project with on-site generation that benefits the broader cluster can sometimes negotiate favorable treatment. A project that requires unusual upgrades will see those costs allocated more heavily.

Most importantly: engage the PUCT comment round. The draft rule is not final. Comments filed by April 17 can materially shape the final framework. Operators who engage in the rulemaking get better outcomes than those who wait for the final rule and complain about the result.

Queue Intelligence has shipped SB 6 eligibility screening as a core feature. Upload a project profile and our engine runs it against the draft 16 TAC §25.194 criteria, flags the readiness gates, models the self-curtailment negotiation range, and estimates the upgrade cost envelope per candidate POI.

Our ERCOT playbook is continuously updated with PUCT filings. We ingest every docket update within 24 hours and push compliance diffs into customer workspaces. When PUCT finalizes the rule in late 2026, our customers will have zero lag between the finalization and their active project updates.

Predevelopment Services ships a fixed-fee Texas eligibility assessment for $18,000 that covers the full analysis — SB 6 eligibility, Batch Study fit, self-curtailment modeling, upgrade cost envelope, comment submission draft, and filing strategy. The engagement takes 8 working days.

For operators who want a shared workspace during the transition period (when the rule is draft and then final), our Queue Intelligence Developer tier ($18,000/month) covers unlimited projects in Texas with a shared Slack channel and priority analyst access. Most Texas-focused operators we talk to are moving onto this tier.

The rulemaking is an opportunity, not just a risk. Projects that engage it actively, shape their comments thoughtfully, and adjust their filings to the new framework will see outcomes far better than projects that try to file against the legacy framework and hope for the best.