PUCT Rules October 19 on Silver Basin's Behind-the-Meter Data Center Case, a Precedent for Texas Commercial Transmission Cost Allocation

The Texas Public Utility Commission (PUCT) has a hard decision window that closes on October 19, 2026, in Docket 59115, a joint application by Silver Basin Digital Infrastructure and West Texas Solar Project II for a behind-the-meter net metering arrangement that pairs roughly 180 megawatts of new data center load with roughly 204 megawatts of solar generation in Pecos County. If the Commission does not act by that date, the arrangement is approved by default, and every Texas commercial electricity buyer just watched a live precedent form for how large co-located loads sidestep the 4CP transmission charges that fund the wires side of the grid.

What Happened

Silver Basin Digital Infrastructure LLC and West Texas Solar Project II LLC (also known as Taygete II) filed a joint application with the Public Utility Commission of Texas on December 12, 2025, under PURA section 39.169, requesting approval of a behind-the-meter net metering arrangement in the AEP Texas Central service area near TNMP's system in Pecos County, with data center energization targeted for around October 2027. Under the proposal, the roughly 180 megawatt data center load sits directly behind the meter of the roughly 204 megawatt solar facility, so the ERCOT grid sees zero net export in most hours and up to about 20 megawatts on peak solar days. Prior AEP Texas system studies at the same site evaluated the data center demand at 184 to 216 megawatts across three separate 2023 and 2024 analyses.

The docket has moved on a fast schedule. ERCOT filed its Study Results and Recommendations on August 20, 2026, following the required transmission security analysis. AEP Texas Inc., the host transmission and distribution utility, filed its Statement of Position on August 31, 2026, and a Response on September 8, 2026. Texas-New Mexico Power Company (TNMP) intervened in opposition, submitting direct testimony from Ross Cloninger and Christopher Gerety arguing that the Far West import-constrained pocket still sees a firm 180 megawatt load when solar output is zero and that the record needs an explicit no-solar and off-peak analysis. The commission set the docket for discussion at its September 11 open meeting, and Order No. 8, dated September 15, 2026, converted the merits proceeding to a paper hearing. The full filing history sits on the PUCT interchange at puc.texas.gov, and ERCOT's independent transmission security study is on the record at ercot.com.

Impact on Commercial Electricity Buyers in Texas

Any behind-the-meter approval widens the base of remaining Texas commercial and industrial loads that fund the transmission grid, so the same wires bill gets divided across a smaller denominator, and we see three channels where that reaches your account inside the next 24 months.

Transmission cost allocation. ERCOT's Four Coincident Peak (4CP) method assigns transmission cost based on a large customer's average share of ERCOT demand during the four highest 15-minute intervals of June, July, August, and September. Duke University's Nicholas Institute for Energy, Environment and Sustainability has estimated that 4CP-linked transmission exposure can approach 30 percent of a large load's all-in bill in some years. Every megawatt of demand that vanishes behind a private meter during those four intervals is a megawatt that stops paying into the wires bill for the following calendar year.

Cost shift to remaining loads. The Office of Public Utility Counsel (OPUC) told the commission in the parallel Project 58484 record that roughly 33 million dollars of transmission cost shifted from large loads to residential customers in calendar year 2024 alone, driven partly by co-location and self-curtailment during the 4CP intervals. Commercial buyers on pass-through TDU structures share the same allocation pool and absorb their share of that shift as well.

Contract timing. In the 9,942 active commercial plans we track across all five TDU territories, the market average for a small commercial account sat at 7.19 cents per kilowatt hour this week and rose 1.2 percent week over week. A precedent-setting decision on October 19 does not move that headline number by itself, but it does move the transmission component that gets baked into every fixed offer priced into 2027 and beyond. If your term ends inside the next 90 days, the shape of your renewal quote is what changes first.

The TxCP Silver Basin Precedent Test: Four Questions Before Your Next Renewal

Before you re-sign or extend any Texas commercial electricity contract in the next 90 days, run the offer through the same four questions we use to read a co-location precedent, because a fixed rate that ignores the transmission side is a rate that reprices the moment the wires bill does.

1. Is your quoted rate fully fixed-inclusive, or does it pass through TDU charges?

A fully bundled fixed rate insulates you near term because the REP has already taken the transmission risk. A pass-through structure means every behind-the-meter approval directly raises your allocated share of the wires bill on your very next invoice.

2. Does your contract term cross the 4CP to 12CP transition window?

The PUCT staff proposed rule under Project 58484 would replace 4CP with a 12-Coincident-Peak methodology measured in 30-minute intervals, plus a minimum billing demand charge for large loads lasting at least 15 years. A 24 to 36 month term signed today straddles that transition window.

3. Are you exposed to the intervenor conditions that may attach to Silver Basin?

TNMP is asking the commission for explicit no-solar and off-peak analysis and strong curtailment conditions. If Silver Basin approves with conditions, expect those conditions to become the template for the next application, which changes what a co-located hedge is worth to your peer group.

4. Do you have your own flexibility to move load off the 4CP intervals?

If you can shift a portion of load out of the four highest 15-minute peak intervals each summer, your absolute exposure drops today under 4CP. Under a 12CP replacement it drops less, because there are three times as many intervals to avoid and the minimum billing demand puts a floor under your assigned share.

The Bigger Reform Behind the Case: Project 58484 and the 12CP Proposal

Docket 59115 is a single application, but PUCT Project 58484 is the systemic overhaul that gives the October 19 decision its precedent weight. The commission opened Project 58484 as its SB 6 (89R) review of transmission cost recovery, and every major party has now filed a position. OPUC argued that 4CP fails to capture large-load disconnection through co-location and self-curtailment, and recommended replacing it with 365CP or 12CP. AEP Companies argued that even loads physically co-located with generation still rely on the transmission system for load-following, reactive power, and reserves, so a nonbypassable charge remains warranted. Oncor pointed to AEP Ohio's 25 megawatt data center tariff with an 85 percent minimum demand as one workable template. The Texas Public Power Association supported 12CP outright, warning that any successor methodology must address cost avoidance by flexible large loads.

PUCT staff issued a draft report on March 16, 2026, and their proposed rule would replace 4CP with a 12CP methodology measured in 30-minute intervals plus a minimum billing demand for large loads lasting at least 15 years. Trade coverage of the staff draft is at energychoicematters.com. The staff proposal is not yet an adopted rule, and the Silver Basin outcome will sit inside whichever framework the commission finalizes over the next 12 to 18 months.

What You Should Do

Turn the October 19 window into concrete steps you can complete inside the next two weeks, whether your commercial contract renews this fall or you are just watching the transmission side of the market for a better entry point.

Pull your current Electricity Facts Label, note your term end date, and separate your energy price per kilowatt hour from your TDU delivery charges so you know your actual exposure surface.
Ask your Retail Electric Provider whether your current fixed offer bundles all TDU and transmission charges or passes them through, and get that answer in writing.
If your term ends inside the next 90 days, request quotes now on 12, 24, and 36 month options for your TDU territory and compare the all-in price, not just the energy component.
Set a calendar reminder for October 19, 2026 to check the PUCT interchange for Docket 59115, for the final order or the auto-approval status.

Questions to Ask Your REP or Broker

When you call a provider in the next two weeks, these questions surface how a large-load precedent is (or is not) already priced into the fixed offer sitting in front of you today.

Does this quoted rate bundle all TDU delivery and 4CP transmission charges, or are they passed through separately on the invoice?
How do your 12, 24, and 36 month offers for the same TDU territory compare today, and how would each one change if the commission converts 4CP to a 12CP methodology inside the next 18 months?
What is the true-up mechanism if the transmission cost allocation methodology changes mid-term on a fixed contract?
What is the early termination fee inside the first year of the term if a transmission-allocation reform lowers the market for equivalent contracts?

For the full picture, see our Texas commercial electricity rates overview. Subscribe to Weekly Market Insights, free. We publish a data-driven rate report every Monday. To compare individual offers by TDU territory and load size, see every commercial plan we track in our data download.

Frequently Asked Questions

What is PUCT Docket 59115?

PUCT Docket 59115 is a joint application filed on December 12, 2025 by Silver Basin Digital Infrastructure and West Texas Solar Project II (Taygete II) under PURA section 39.169, seeking approval of a behind-the-meter net metering arrangement pairing a roughly 180 megawatt data center with a roughly 204 megawatt solar facility in Pecos County. The commission has an October 19, 2026 default-approval window.

What is a behind-the-meter data center?

A behind-the-meter data center is a large computing load electrically located on the customer side of the utility revenue meter of a co-located generator, typically solar or gas, so its consumption is served directly by the generator without crossing the transmission grid meter that triggers wires charges.

How is Texas 4CP transmission cost allocated?

ERCOT's Four Coincident Peak method assigns transmission cost to large customers based on their average share of ERCOT demand during the four highest 15-minute intervals of June, July, August, and September. Those four values set the customer's wires bill for the entire following calendar year.

What happens if PUCT does not act by October 19, 2026?

If the Public Utility Commission of Texas does not issue a final order on Docket 59115 by October 19, 2026, the joint application is approved by default under PURA section 39.169, and the arrangement proceeds without a commission signoff, becoming the first substantive precedent for how a large co-located Texas data center can net out 4CP transmission exposure.

Where can commercial buyers see current Texas rates for their TDU territory?

Our live data download covers every commercial plan we track across all five Texas TDU territories (Oncor, CenterPoint, AEP Texas Central, AEP Texas North, TNMP), updated daily, so buyers can compare offers by TDU zone and load size.