ERCOT Can Now Cut Power to Data Centers

August 3, 2025 – A new Texas law, Senate Bill 6, took effect Monday, giving the Electric Reliability Council of Texas (ERCOT) expanded authority to protect the state’s power grid during high-demand emergencies. The measure specifically targets large-scale electricity users—such as cryptocurrency mining operations, data centers, and heavy industrial plants—that consume at least 75 megawatts (MW) of power, roughly equal to the demand of 19,000 homes.

Under the law, these major users must be “curtailment-ready” as a condition of connecting to the Texas grid. That means ERCOT can order them to temporarily shut down operations or switch to backup power sources when extreme heat, cold, or other demand surges threaten grid reliability. The move comes after years of concern about crypto mining and other energy-intensive industries adding stress to a grid already strained during peak weather events.

The new rules apply to any large loads connecting to the grid after Dec. 31, 2025. Existing facilities are exempt, as are critical services such as hospitals and natural gas infrastructure.

Supporters say the law strikes a balance by allowing businesses to operate while ensuring they do not compromise grid stability for millions of Texans. By requiring backup systems or shutdown capabilities, the state hopes to avoid rolling blackouts like those seen in February 2021. Industry operators, however, have raised concerns about costs and potential disruptions to business models.