I just reviewed the ERCOT Large Load Interconnection Queue and the University of Texas Energy Institute’s July 2025 Large Load Symposium report, and a wave of new large load interconnections is about to hit commercial buyers in Texas.
You’ll learn how the surge in data center and industrial demand is reshaping grid reliability, what it means for your facility’s demand charges, and how to position your business for the next rate cycle.
Introduction
ERCOT’s grid is under unprecedented pressure. The latest data shows 205 gigawatts of large load interconnection requests—more than double the system’s peak demand record. Most of these are data centers and crypto mines, each capable of drawing more power than entire cities.
This isn’t just about more megawatts. It’s about how these loads interact with the grid, how ERCOT is responding, and how those changes will ripple through your electricity rates in Texas.
Commercial facilities are already seeing the effects: higher demand charges, more volatile rates, and new reliability protocols that could impact your operations.
The Surge in Large Load Interconnections
As of July 2025, ERCOT had 4.6 GW of large loads energized and another 2.1 GW approved but not yet energized. The total pipeline is now over 181 GW by 2030, with more than 70% from data centers.
These aren’t just new customers—they’re massive, concentrated loads that can spike demand in seconds. ERCOT is struggling to keep up with the pace, and grid planners are warning that reliability could be compromised if interconnection timelines outpace transmission upgrades.
Grid Reliability and Operational Risks
ERCOT’s own representatives cite three major challenges: system adequacy, response and control, and voltage ride-through capability. The grid’s ability to handle sudden load swings is being tested.
Many large loads, especially data centers, are designed to disconnect during grid disturbances. If a major facility drops offline, it could trigger cascading outages. ERCOT is now pushing for more transparency and flexibility, including voluntary demand reduction programs for large loads.
For commercial buyers, this means more uncertainty in grid stability and a higher risk of demand spikes that could trigger your facility’s demand charges.
Demand Charge Impacts on Texas Electricity Plans
Demand charges in Texas are based on your facility’s peak usage in 15-minute intervals. With more large loads on the grid, the risk of sudden, system-wide demand spikes is rising.
ERCOT’s latest reliability assessments show that unplanned outages at coal plants and transmission bottlenecks are already pushing demand charges higher. Facilities in areas with heavy new load development are seeing demand charges climb from $4.50/kW to $7.20/kW in just one year.
These trends are likely to continue as more large loads come online, especially if transmission upgrades lag behind.
Analyst Insight
For most commercial facilities, I recommend locking in fixed-rate plans with demand charge caps before the next rate cycle. If your load factor is below 50%, consider an index plan with a demand charge management clause—this gives you flexibility to benefit from lower off-peak rates while protecting against spikes.
Because grid reliability is under pressure and demand charges are rising, I advise clients to review their load profiles and peak usage patterns. If you’re in a region with heavy new load development, prioritize contracts with clear demand charge language and flexibility to adjust usage during peak events.
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Conclusion
The surge in large load interconnections is reshaping the Texas grid and driving up demand charges for commercial facilities. By understanding these trends and positioning your business with the right electricity plan, you can protect your bottom line and maintain operational stability in 2025 and beyond.
Stay ahead of the curve—review your contract terms, monitor grid reliability updates, and be ready to adapt as the market evolves.
