PUCT Clears 260-MW AI Data Center Wind-Farm Deal as Texas Summer Load Approaches Record
The first co-location approval in Texas sets a grid access template for data centers as ERCOT's peak demand forecast closes in on 92 GW.
Texas's electricity regulator approved a 260-megawatt AI data center to co-locate alongside a wind farm of roughly the same capacity during the week of July 20, 2026 (2026-07-20), in a ruling the Public Utility Commission of Texas described as a potential template for future co-located power loads across the state.6
The approval comes with curtailment conditions. The data center must reduce consumption when grid conditions require it. But the ruling creates a path for large power consumers to access dedicated generation without competing in the standard interconnection queue, which has grown to a size ERCOT's own executives now describe as exceeding realistic expectations.6
That queue stands at an extraordinary volume. Jeff Billo, ERCOT's vice president of interconnection and grid analysis, said on Tuesday, June 2, 2026 (2026-06-02) that he expected roughly 100 gigawatts of projects to qualify for what ERCOT calls Batch Zero, the first cohort under new interconnection rules the board approved that same day.3
ERCOT CEO Pablo Vegas had previously cited an estimate of 228 GW of new capacity potentially online by 2032. He walked that figure back on June 2, 2026 (2026-06-02), calling it "too high of a figure based on realistic expectations." About half the projects in the queue, on that math, are unlikely to connect on a timeline meaningful for near-term grid planning.3
The demand growth driving those filings is real. Dan Woodfin, ERCOT's vice president of system operations, said peak load could top 92 GW this summer, a result of hotter-than-normal weather and surging electricity consumption from crypto-mining and data center facilities combined. Texas's previous record peak was 85.5 GW, reached in August 2023.3
Nationally, data center investment is projected to reach roughly $500 billion in 2026 alone, and Texas is drawing an outsized share, with nearly 20 projects underway or planned in the Austin area alone, OilPrice.com reported.4
The buildout is rewriting land use across West Texas. Parcels near Abilene, Amarillo and Midland that grew mesquite and cotton a year ago now host cranes over half-finished turbine halls and freshly trenched pipeline right-of-way. One piece of land restricted by deed to parkland sold for $10 million to a data center developer this year; neighbors filed suit to enforce the restriction.5
Energy companies have been repositioning to capture the new load. Enbridge is building an 8,000-acre solar farm roughly 35 miles from Abilene, a $1.1 billion project that was originally planned as a wind farm until airspace restrictions around Dyess Air Force Base ruled out turbines.5
The generation mix is shifting beneath the demand growth. For the first time, solar is on track to produce more electricity than coal on the ERCOT grid in 2026, as Texas coal capacity continues to retire, Canary Media reported.1
ERCOT's June 2, 2026 (2026-06-02) rules addressed the grid's two most immediate exposure points. One package established batch processing for large new electricity consumers, aimed at controlling queue growth. The other requires data centers to stay continuously connected to the grid rather than trip offline in groups — a direct response to warnings from U.S. grid managers that simultaneous data center disconnections could trigger cascading blackouts.3,2
The PUCT's co-location ruling from late July adds another instrument to that toolkit, letting large loads anchor to specific generation assets rather than draw from the shared system. Whether the curtailment conditions attached to the deal prove enforceable under real summer stress conditions is the specific constraint that Woodfin's 92 GW scenario — well above the 85.5 GW record — will test through August.6,3