SAN ANTONIO — Cheers rang out in the Texas Capitol in early June as the lawmakers, lobbyists and public advocates celebrated the end of the biennial legislative session, a 140-day marathon of meetings, hearings and votes. 

Perhaps fewer celebrated more than Mark Stover, executive director of the Texas Solar + Storage Association (TSSA). For the second session in a row, clean energy interests dodged the most damaging legislation. Data center developers and other large loads, however, saw several constraints placed on their integration into the ERCOT grid. 

Not surprisingly, Stover said he was extremely pleased with the session. The five bills his organization prioritized all made their way to Gov. Greg Abbott’s desk. Proposals he said would have “greatly harmed” the clean energy sector, raised energy prices, undermined grid reliability, and weakened economic and business energy strategy died on June 2, the legislature’s sine die. 

The most onerous bill would have required county governments within 25 miles of new renewable projects to hold hearings before regulators could rule on a permit application and would have required setbacks from property lines and any habitable structure. A second bill would have stipulated that 50% of all new capacity be sourced from dispatchable generation, excluding batteries. 

Still a third would have directed existing renewable facilities in the ERCOT region to back up their energy production with gas generation or be subject to fines. (See Growing Clean Energy Sector in Texas May Avoid Damaging Legislation.) 

“These proposals would have distorted the energy market and damaged the all-of-the-above energy strategy that drives success in Texas and is needed more than ever,” Stover told RTO Insider. 

He said lawmakers instead advanced “thoughtful solar power and energy storage policy” and rejected efforts to “unnecessarily punish” grid-scale clean energy or restrict distributed resources. 

Aurora Energy Research said in a report that restricting renewable energy’s expansion would increase the risk of capacity shortfalls and load shedding and increase power prices 14% by 2035. That translates to a 10% increase in customer bills, adding $225 each year to the average Texas household and $6.3 million annually for 100-MW and above industrial consumers. Total system costs would climb by $5.2 billion, the analytics firm said. 

“As demand surges, the findings underscore the essential role of renewables and flexible technologies in meeting ERCOT’s accelerating electricity needs,” Aurora said in the report. 

Stover said solar and storage’s continued growth, along with the upcoming deployment of the dispatchable reliability reserve service (DRRS) product and real-time co-optimization, will help meet that demand in the near term. 

“Solar power and energy storage are the fastest-growing grid technologies in Texas and can be deployed more quickly than any other generation resource,” he said. “Solar and storage are best positioned to help Texas meet new load growth while increasing reliability and driving affordability.” 

ERCOT’s generator interconnection queue indeed is dominated by battery storage (174 GW) and solar (158 GW), followed by wind (41 GW) and gas (32 GW). The queue has 2,031 active requests totaling 409 GW of capacity. 

Having escaped legislation that could have derailed their progress, renewable resources and storage will be critical in meeting demand over the next few years. Long lead times for steam turbines and the potential negative effects of steel and aluminum tariffs have pushed gas projects into the future. The Texas Energy Fund’s low-interest loan program, designed to add 10 GW of gas generation, has had eight projects drop out or be removed in recent months. (See 2 More Projects Fall out of TEF Loan Program.) 

While quipping that he “survived” the session, ERCOT CEO Pablo Vegas said he saw lawmakers keenly focused on trying to bring balance to the grid and its resources, each with their own pros and cons. 

“Many of the bills that gave the renewable community concerns, based on the approach of how … they were going to try to bring that balance, were grounded in the right intention,” he said in an interview. “‘How do we make sure that there is an even playing field for the opportunity and the incentive for reliable long-duration, dispatchable generation?’ And I think that’s a laudable goal that we still need to continue to focus. 

“We just don’t want to slow down the growth of energy supply right now in an environment where we’re seeing such a significant growth projection and growth forecast ahead of us over the next three, four, five years.” 

The grid operator is tracking about 156 GW of large loads, more than double the 63 GW it was following in December; it defines large loads as those 75 MW or above. Residential load, meanwhile, is growing at 1.2%.

Recent state legislation requires ERCOT to include any load in its projections that has not yet signed an interconnection agreement. Recognizing that not all proposed data centers and cryptocurrency mines will show up, staff now apply a discount factor to load projections. They have proposed a 49.8% reduction in data center loads and a 55.4% cut in loads that have been attested to by officers from transmission and distribution providers. (See ERCOT, PUC Refining Future Load Projections.) 

ERCOT added more than 13 GW of capacity last year. However, effective load-carrying capability — generation’s ability to serve demand — reduces that capacity to a little bit more than the 7,527 MW of ELCC capacity added in 2001. Much of the additional capacity that year was gas-fired. 

“We don’t have a shortage of energy on the ERCOT grid. What we really have, for a few hours, are these higher-risk tail-level events [where] we need to make sure we can always keep the lights on,” Vegas said. “There’s really a lot of energy throughout the year that these data centers can leverage and that are going to be coming online. They’re going to bring even more economic support for growth and supply.” 

Batteries and solar proved instrumental last year in meeting demand. Solar energy provided energy during the afternoon (along with wind, it produced 34.8% of ERCOT’s total energy in 2024), with batteries picking up when the sun set. Storage capacity reached 10 GW in 2024 and is forecast to almost triple to 27.5 GW over the next two years. 

Vegas called batteries the grid’s “Swiss Army knife.” 

“Batteries can be the load when they’re needed. They can be supply when they need to be, and they bring incredible flexibility and agility,” he said. “But their duration is limited, and so it’s matter of building a portfolio that can leverage all of [batteries’] characteristics and features in a way to bring the most value to the system.” 

Saying the renewable energy policies were one part of the legislature’s storyline, Vegas turned his attention to Senate Bill 6. One of the Senate’s top priorities, the legislation directs the Public Utility Commission to determine a cost allocation for large loads to ensure they pay their fair share of infrastructure expenses. 

The bill also requires large-load developers to pay a $100,000 fee for the initial screening studies, with an increase for larger capacity requests. That has been met with approval by the cryptomining community, which says it will address the “phantom loads” in the queue. 

Vegas agreed that SB6 will ensure cost allocation is “being done fairly.” 

“The other side of it was creating that pathway for the large data centers,” he said. “Senate Bill 6 really created some clarity and a pathway for that growth to be enabled in a very reliable way. I’m encouraged that the legislature recognized the need for some rules around how to make sure that large energy users could work with the grid and the grid operator in partnership to not only support the economic growth that the data centers are bringing, but the reliability for the rest of the constituents. 

“It takes up the questions of cost allocation, and that’ll be something that the Public Utility Commission and the stakeholders will work through as well,” he added. 

As of June 19, Abbott had yet to sign the bill. He has until June 22 to sign or veto legislation. Those he doesn’t sign become law.