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Signed Into Law
Signed June 20, 2025Effective 2025-09-01
SB6

Regular Session

Relating to the planning for, interconnection and operation of, and costs related to providing service for certain electrical loads and to the generation of electric power by a water supply or sewer service corporation.

Government Affairs & Regulatory Compliance Analysis

SB6: Government Affairs Overview

SB6 fundamentally shifts Texas interconnection policy from an "open access" model to a "pay-to-play" financial commitment model. The law imposes significant upfront fees and security deposits on Large Load Customers (data centers, crypto miners, industrial facilities >75MW) and mandates strict regulatory reviews for co-location/net-metering projects. Additionally, it empowers utilities to remotely disconnect new large loads during grid emergencies, ending the era of speculative queue positions.

Sen. Charles Schwertner·Senate Bill·Regular Session

Critical
High Cost
Effective:2025-09-01
Enforcing Agencies

Electric Cooperatives • Electric Reliability Council of Texas (ERCOT) • Municipally Owned Utilities • Public Utility Commission of Texas (PUC)

Business Impact

Who SB6 Affects

This legislation has regulatory implications for the following Texas businesses and organizations:

Regulatory Priority: critical

Significant regulatory changes (effective 2025-09-01). Review with your legal and compliance teams to understand implications.

⚡

Energy

Affected business types:

  • Power generators
  • Electric utilities
  • Renewable energy developers
  • Battery storage operators
View all energy legislation

Key Operational Considerations

  • 1Land Leases: Must be fully executed *prior* to submitting an interconnection request. Letters of Intent (LOIs) are no longer sufficient to prove "Site Control."
  • 2Project Management: Interconnection teams must be retrained to stop "queue shopping." Submitting duplicate requests to different utilities now triggers mandatory disclosure and potential penalties.

Estimated Cost Impact

highSignificant operational investment may be required.

Enforcing Agencies

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SB6
Critical
Relating to the planning for, interconnection and operation of, and costs related to providing service for certain electrical loads and to the generat...
Critical Compliance Urgency
Requires immediate attention
Cost Impact
High
Effective
2025-09-01
Enforcing Agencies
Electric CooperativesERCOTMunicipally Owned UtilitiesPUC
Primary Author: Sen. Charles Schwertner
89th Texas Legislature
jdkey.com
01

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

  • Effective Date: September 1, 2025
  • Compliance Deadline:
  • Immediate (Sept 1, 2025): New fees and disclosure rules apply to all new interconnection requests.
  • December 31, 2025: Hard deadline for installing remote disconnection equipment. Loads interconnected after this date *must* have this hardware to operate.
  • Agency Rulemaking:
  • November 30, 2025: PUC begins evaluating transmission cost allocation (4CP) and retail ratemaking.
  • December 31, 2026: Deadline for final PUC rules on wholesale transmission cost assignment.
  • Regulatory Gray Zone: Between Sept 1, 2025, and Dec 31, 2026, cost allocation methodologies will remain in flux; budget for maximum potential transmission exposure.

Immediate Action Plan

  • Audit the Queue: Immediately review all pending interconnection requests. If they are speculative ("ghost loads"), withdraw them before Sept 1, 2025, to avoid new fees and disclosure mandates.
  • Secure Liquidity: Review balance sheet capacity with your CFO to ensure you can post the required per-MW security deposits for active projects.
  • Update Hardware Specs: For any project scheduled to energize in late 2025 or 2026, verify that engineering designs include utility-controlled remote disconnection switchgear.
  • Execute Leases: Convert all land LOIs to executed leases immediately to satisfy the new "Site Control" evidentiary standards.

Operational Changes Required

Contracts

  • Interconnection Agreements (IAs): Must be revised to include mandatory consent for remote disconnection hardware. For Co-ops and Munis, IAs must now explicitly pass through interconnection costs; rate-basing these costs is prohibited.
  • Power Purchase Agreements (PPAs): Co-location/Behind-the-Meter deals require "Regulatory Out" clauses. If the PUC denies the arrangement following the new 120-day study, the contract must allow for termination without default.
  • Land Leases: Must be fully executed *prior* to submitting an interconnection request. Letters of Intent (LOIs) are no longer sufficient to prove "Site Control."

Hiring/Training

  • Project Management: Interconnection teams must be retrained to stop "queue shopping." Submitting duplicate requests to different utilities now triggers mandatory disclosure and potential penalties.
  • Legal/Compliance: Staff must be trained to mark all interconnection filings as "Confidential – Competitively Sensitive" to utilize the new Public Information Act protections provided by the bill.

Reporting & Record-Keeping

  • Disclosure of Duplicates: You must file a formal disclosure of any "substantially similar" interconnection requests submitted elsewhere in ERCOT.
  • Backup Generation Specs: If your facility has backup generation capable of serving >50% of peak demand, you must report detailed specifications to the utility upon interconnection.
  • Co-Location Notice: You must notify ERCOT and the PUC *before* implementing any net-metering arrangement where load exceeds 10% of the generation capacity.

Fees & Costs

  • New Screening Fee: Budget a flat fee of at least $100,000 for every new interconnection request (unused portions are credited).
  • Security Deposits: Prepare for a new "Dollar-per-MW" financial security requirement. This must be liquid (Cash, Letter of Credit, Surety Bond).
  • Forfeiture Risk: If you withdraw a request or fail to meet load ramp milestones, this security is forfeited.

Strategic Ambiguities & Considerations

The PUC has significant discretion in the upcoming rulemaking phase. Watch these three areas closely:

  • 1. The "75 MW" Threshold: The PUC has statutory authority to *lower* this threshold. A 20MW facility could be reclassified as a "Large Load" subject to these fees next year.
  • 2. Security Amount: The specific dollar-per-MW amount for the financial security is undefined. The PUC could set this high enough to act as a barrier to entry.
  • 3. Co-Location "Reasonable Conditions": The PUC can impose conditions on co-location projects to preserve reliability. They may require the generator to keep capacity available to the grid, potentially undermining the economics of behind-the-meter deals.

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Information presented is for general knowledge only and is provided without warranty, express or implied. Consult qualified government affairs professionals and legal counsel before making compliance decisions.

02

Legislative Timeline

This bill's path through the Texas Legislature

Filed
Feb 12, 2025
Passed Senate
Mar 19, 2025
Passed House
May 27, 2025
Signed
Jun 20, 2025
Effective
Sep 1, 2025
TopicsUtilitiesUtilities--electricElectric Reliability Council of TexasPublic Utility CommissionCity GovernmentCity Government--utilities
03

Senate Authors

Sen. Charles SchwertnerRepublican · Primary Author
Coauthors (8)

House Sponsors

Rep. Phil KingRepublican · Primary Sponsor
Joint Sponsors

Bill Text(with markup)

Showing first 50k characters.

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

Related Legislation

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More from Sen. Phil King

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Related by Topic

View more Utilities legislation
Quick Reference

Frequently Asked Questions

Common questions about SB6

Q

What does Texas SB6 do?

SB6 fundamentally shifts Texas interconnection policy from an "open access" model to a "pay-to-play" financial commitment model. The law imposes significant upfront fees and security deposits on Large Load Customers (data centers, crypto miners, industrial facilities >75MW) and mandates strict regulatory reviews for co-location/net-metering projects. Additionally, it empowers utilities to remotely disconnect new large loads during grid emergencies, ending the era of speculative queue positions.

Q

Who authored SB6?

SB6 was authored by Texas Senator Phil King during the Regular Session.

Q

When was SB6 signed into law?

SB6 was signed into law by Governor Greg Abbott on June 20, 2025.

Q

Which agencies enforce SB6?

SB6 is enforced by Electric Cooperatives, Electric Reliability Council of Texas (ERCOT), Municipally Owned Utilities and Public Utility Commission of Texas (PUC).

Q

How significant are the changes in SB6?

The regulatory priority for SB6 is rated as "critical". Businesses and organizations should review the legislation to understand potential impacts.

Q

What is the cost impact of SB6?

The cost impact of SB6 is estimated as "high". This may vary based on industry and implementation requirements.

Q

What topics does SB6 address?

SB6 addresses topics including utilities, utilities--electric, electric reliability council of texas, public utility commission and city government.

Q

What are the key dates for SB6?

Key dates for SB6: Effective date is 2025-09-01. Rulemaking: Begin evaluation of wholesale transmission cost allocation methodology (4CP) and retail ratemaking practices. (2025-11-30); Adopt final rules regarding wholesale transmission cost assignment. (2026-12-31). Consult with legal counsel regarding applicability.

Q

What are the penalties under SB6?

SB6 establishes the following penalties: administrative penalty of Denial of Interconnection or Service for Failure to pay the $100,000+ study fee, failure to provide required financial security, or failure to disclose duplicate service requests.; operational penalty of Mandatory Load Shed/Curtailment for ERCOT direction during energy emergency alerts for large loads with backup generation or those participating in the new reliability service.. Consult with legal counsel for specific applicability to your situation.

Q

Which Texas businesses are affected by SB6?

SB6 primarily affects utility companies and energy providers. These businesses should review the legislation with their legal and compliance teams to understand potential impacts.

Need Strategic Guidance on This Legislation?

JD Key Consulting is an Austin, Texas-based government affairs firm led by James Dickey, former Chairman of the Republican Party of Texas. We specialize in Texas regulatory compliance and legislative strategy for data centers, energy, banking, and manufacturing.

Legislative data provided by LegiScanLast updated: January 11, 2026