ERCOT's New 75 MW Curtailment Rule: What Texas C&I Buyers Must Do

This is a narrow corner of the Texas deregulated electricity market. But it matters for industrial sites, multi-site operators, and any commercial buyer whose load is growing. Here is what changed, who it touches, and a 4-question check you can run today.

The News

NERC, the North American Electric Reliability Corporation, lowered its 2026 summer demand outlook for ERCOT. The reason is unusual. Large flexible loads, mainly data centers, are now treated as interruptible. In its 2026 Summer Reliability Assessment, NERC cut ERCOT's net internal demand forecast by 3.7 GW, or 4.6 percent, and total demand by 1.9 GW, or 2.3 percent, versus 2025. The driver is a Texas law. It tells loads of 75 MW or more that connect from 2026 onward to accept mandatory curtailment during firm load shed events. On paper, that helps reserve margins. In real terms, it changes how large buyers should plan for contracts and risk.

What Happened: The Texas Large Load Curtailment Rule 2026

The Texas large load curtailment rule 2026 comes from Senate Bill 6. The 89th Legislature passed it, and it became effective September 1, 2025. SB 6 created a mandatory demand management program. Any load of 75 MW or more that connects to ERCOT from 2026 onward must install shutoff equipment as a condition of connection. Utilities can then disconnect those loads during firm load shed events. In short, the law lets the grid operator disconnect large loads during a crisis.

SB 6 also set up a separate, voluntary program. Under it, ERCOT pays large customers to cut load. It gives at least 24 hours of notice first. The load then stays off for the length of an Energy Emergency Alert, or until ERCOT can turn it back on safely. Loads that already cut use to chase a lower wholesale price cannot join. The Public Utility Commission of Texas has several open rulemaking projects on these rules. Final versions are due later in 2026.

What the Rule Means for Commercial Electricity Buyers

Start with pricing. Reserve margins look better. That is because NERC now counts 75 MW-plus data centers as curtailable. But the supply crunch has not gone away. ERCOT's own outlook says peak demand could reach 367,790 MW by 2032 once large and medium loads are counted, more than triple today's level. Data centers drive most of that growth. During truly tight hours, prices still spike. The rule covers new 75 MW-plus connections, not the existing fleet. So most buyers get no direct break on their rate.

Next, contracts. The curtailment duty attaches at connection. That is the detail most coverage skips. Is your site nearing 75 MW in a single ERCOT zone? Then negotiate before you turn on new capacity, not at renewal. Many existing contracts have no force majeure language for a mandatory ERCOT curtailment. They set no notice window. They promise no payment if your load is cut by order rather than by choice. Those are the clauses to add.

Finally, operations. A site that crosses the threshold has work to do. Map its load against ERCOT zone lines. Price the cost of a multi-hour shutdown. Then decide if backup power or battery storage is worth it as a bridge. For multi-site operators, the math is harder. Co-located sites can add up toward the threshold in ways a single-meter view misses.

The C&I Buyer's Curtailment Risk Assessment

Use this 4-question check to see if the 75 MW curtailment rule applies to you, and what contract protections to seek. Work through it in order. A "yes" at any point raises your priority.

1. Single-zone load test. What is your peak load within a single ERCOT pricing zone today? If it is within 20 percent of 75 MW, treat yourself as in scope.
2. Growth trigger test. Do you have planned additions that could push a single-zone load past 75 MW? Think new lines, expansion, or co-located tenants. New capacity is what triggers the rule at connection.
3. Contract language test. Does your contract set a curtailment notice window, a credit, and force majeure cover for a mandatory ERCOT curtailment? If any is missing, flag it for your next talk.
4. Continuity test. Could you run on backup power or storage during a multi-hour curtailment? And do you know the cost per event? If not, that gap is your real risk.

What You Should Do

1. Map your single-zone load. Calculate aggregate peak load per ERCOT zone. If any zone is approaching 75 MW, future additions may trigger the curtailment requirement.
2. Audit your contracts. Review force majeure and curtailment language in every active electricity contract before the next renewal date.
3. Ask for the notification window. Have your broker or REP confirm the advance-notice period and channel you would receive before a curtailment.
4. Request compensation language. Push for a credit or rate adjustment if a mandatory curtailment reduces your actual consumption.
5. Evaluate backup options. Price on-site backup generation or battery storage as a bridge during curtailment windows.
6. Run the multi-site math. For portfolios, check whether co-located sites could add up past 75 MW in one zone.
7. Calendar a renewal checklist. Add "curtailment language review" as a required line item on every contract renewal going forward.

For ongoing context, follow ERCOT market news, and if you want help benchmarking, you can download the current commercial plan data or contact the TxCP team.

Questions to Ask Your REP or Broker

• Does my current contract include force majeure language covering a mandatory ERCOT curtailment, and if not, can it be added?
• If ERCOT curtails my facility, how does that appear on my invoice, and does it reduce my demand charge?
• At what aggregate single-zone load would my facility fall under the 75 MW mandatory curtailment interconnection requirement?
• What notice period would I receive before a curtailment, and through which communication channel?
• Are there REP products that explicitly price in curtailment risk for large commercial and industrial customers?

Frequently Asked Questions

What is the ERCOT mandatory curtailment rule for large loads?

Under Texas Senate Bill 6, any new load of 75 MW or more that connects to the ERCOT grid from 2026 onward must accept mandatory curtailment during firm load shed events. Shutoff equipment is required as a condition of connection. That lets the grid operator reduce or disconnect those loads during a grid emergency.

Does the rule affect existing C&I customers or only new connections?

The rule applies to new 75 MW-plus connections from 2026 onward. It is not retroactive to existing sites. Even so, existing buyers should review their contracts. The market is shifting toward curtailment, so it is worth confirming your notice, payment, and force majeure language before any renewal or expansion.

Why did NERC reduce the ERCOT summer demand forecast?

NERC now treats large data center loads as interruptible, because the rule lets grid operators switch them off during emergencies. That lowers the firm demand ERCOT must plan to serve. So NERC cut the net internal demand forecast by 3.7 GW and total demand by 1.9 GW for summer 2026. Reserve margins look better as a result.

What happens to my electricity rate if I am curtailed?

That depends on your contract. A curtailment cuts your use during the event. Whether it lowers your demand charge or earns a credit comes down to the exact wording in your agreement. If your contract says nothing about mandatory curtailment, you could carry the cost of a shutdown with no rate offset. That is why the payment and notice clauses above matter.