The power figure in a data-center purchase agreement is usually written as if it were already real. Seventy-five megawatts, or two hundred, or a gigawatt, with a date and a price attached. What the number often describes is a request: a place in a queue, a study that may not be finished, an agreement that may not be signed, a load that is not yet on the system and may never be firm.
Texas is now asking to see the paperwork.
On August 3, Governor Greg Abbott directed the Public Utility Commission of Texas and the Electric Reliability Council of Texas to complete a "comprehensive verification and audit" of data centers advancing through the interconnection process before any additional data centers are approved to move forward.1 His letter put the queue at approximately 474 gigawatts of connection requests, more than five times the state's record peak demand on the ERCOT system, and said that about 90 percent of the new requests were data centers.1 Those figures are the governor's characterization of the queue, not a completed audit. The audit is the point.
The work sits inside Batch Zero, ERCOT's one-time transitional study of Large Loads, defined as 75 megawatts or greater, that seek to interconnect under Planning Guide Revision Request 145.2 On November 5, Chad V. Seely, ERCOT's senior vice president for regulatory policy and its general counsel, told the Commission that staff and outside counsel had reviewed first-round responses from 257 developers, covering about 5,140 questions. ERCOT expected to send a second, shorter, developer-specific round of questions to 80 percent of the developers, with a five-business-day deadline to explain deficiencies. A report is due to the Commission by December 10, ahead of the Commission's December 17 open meeting.34
The review is not finished. Even so, Seely's presentation listed four problems that keep recurring: missing documentation of affiliate relationships, an inability to demonstrate site control, an inability to show that long-lead equipment has been ordered and will arrive before energization, and difficulty confirming how much financial security has actually been posted.3 Those are not exotic regulatory failings. They are the same gaps a buyer or lender would hope to close before treating a megawatt as an asset.
What the queue already admitted, and what the pause actually covers
By early September, ERCOT had given interconnecting transmission service providers a conditional classification of every Batch Zero Large Load. Two hundred four projects, totaling 66.4 gigawatts, were conditionally included as base load, and 158 projects, totaling 127.9 gigawatts, as studied load. A further 373 projects, totaling 302.2 gigawatts, were already omitted from that included-load picture as excluded load.2 Final inclusion or exclusion, ERCOT said, would wait on the verification and would be provided in December.
The pause around this process is narrower than some of the early coverage implied. On August 3, ERCOT issued a market notice pausing the Batch Zero study process and delaying final classification of all Large Loads. It also paused approvals to energize data centers and virtual currency mining facilities of 75 megawatts or greater.2 The September board presentation is careful about the scope: the energization pause covers new Large Load data centers and crypto facilities not yet connected to the ERCOT system, and it lasts until both the eligibility verification and a separate community-impact review are complete. Medium loads, and Large Loads that are not data centers or crypto facilities, were not placed under that same freeze.25 In August, ERCOT told the Commission that seventeen Large Loads, mostly data centers, had already cleared every ERCOT gate except the last, with 6,608 megawatts of peak demand ramping over five years, and that those energization requests had not been approved.5
Seely also said in August that ERCOT would not complete the Batch Zero interconnection study by the original Planning Guide deadline of April 9, 2027, and was still working out a new timeline.6 The September board materials were slightly more reserved, describing the impact on the study schedule as still to be determined.2
A parallel community-impact questionnaire, issued to 465 loads, is due in the same December 10 filing. All 245 Large Loads in that survey responded. Preliminary results, which ERCOT flagged as subject to change, cover about 177 gigawatts of requested capacity and go to water, cooling, ownership and local effects. The eligibility verification is the piece that tells a buyer whether the megawatts have a site, a parent, equipment on order and security behind them.4
Four gaps that belong in diligence, not in a footnote
Affiliate documentation is the first item. A project company in a queue is not always the entity that will fund, construct or take service. If the relationship to the parent or credit-support provider cannot be shown, a buyer cannot tell whose promise it is underwriting, or whether a parent guarantee actually attaches.
Site control is the second. A requested megawatt without a demonstrated right to the land, the lease or the easement is a location in a slide deck. Recurring gaps in site-control evidence suggest that some of the queue was built on sites that were hoped for rather than held.
Long-lead equipment is the third, and the test is stricter than a purchase order. The deficiency ERCOT keeps finding is an inability to establish that the equipment has been ordered and will be delivered before energization.3 A transformer or switchgear slot that slips past the commercial operation date is a delay in the megawatts the model assumes will be there.
Financial security is the fourth, and the wording matters. ERCOT did not say, in the November update, that developers had failed to post security across the board. It said it was having difficulty confirming the amount posted.3 In a November 4 letter, Seely also noted that each Large Load that had asked for more time to post security had, by then, posted it, and that ERCOT might ask the Commission only to recognize those late postings as timely.4 A deal that prices "secured" capacity should still be able to state the instrument, the issuer, the amount and the conditions under which it can be drawn or returned.
None of this requires a buyer to wait for the December report. The report will say which Batch Zero projects survive official scrutiny in Texas. A transaction in Texas, or anywhere else, can ask the same four questions of the seller now.
Grade the megawatt, not the press release
A megawatt can sit in at least six different states, and deals often price them as one number. The states below are an underwriting framework, not ERCOT's official categories. ERCOT's Batch Zero language (base load, studied load, excluded) answers a different question: how a project is modeled in a transitional reliability study. A buyer still has to know how far the megawatt has traveled from a request to firm supply.
| State of the megawatt | Evidence a buyer can ask to see | How a deal could treat the gap |
|---|---|---|
| Request | A dated interconnection or utility service application, with a named site and a requested MW | Do not pay as if capacity were secured. Treat as option value at most. |
| Queue position | Written confirmation of acceptance into a queue or batch, with a position or case number | Price at a steep discount to energized firm supply. Condition further diligence on the project remaining in the queue. |
| Completed study | Delivered study results: constraints, required upgrades, cost estimates and a date | Useful for valuation, but still a paper right. A buyer could hold back consideration until an agreement is executed and security is posted. |
| Executed agreement | A signed interconnection or transmission service agreement, plus posted financial security in a confirmed amount | Closer to a real asset. Remaining risk is construction, timing, and whether the service is firm or only interim. |
| Energized | Approval to energize, and metered load at the site | The megawatt exists. It may still be interruptible, ramp-limited or short of the contracted peak. |
| Firm or reliable | Firm service, completed network upgrades or designated capacity, and a residual curtailment or redispatch risk that can be priced | This is what "power" usually means in a model. Anything short of it belongs in the price, a holdback, an earn-out or a condition to close. |
The table is a way to stop an offering memo from treating a queue position and an energized, firm megawatt as interchangeable inventory.
Where a file is weak on affiliates, site control, equipment or security, a buyer could cut the price to match the state the megawatts are actually in, hold back a portion of consideration until energization or firm service (released against metered load rather than a promised ramp), pay an earn-out only when a defined block reaches a later state, or make documented site control, equipment delivery dates and confirmed security conditions precedent to closing or to a funding draw. Those are commercial choices, and they will be negotiated. The power gap is a valuation and conditions problem, not a footnote to the power section.
Sellers will argue that a queue position in a constrained region has option value, and that some documentation will catch up between signing and close. That may be true. It is also why the state of each megawatt, and the evidence behind it, should be scheduled as a closing deliverable rather than described in prose.
Texas is not a special case
The official test is underway in ERCOT, but the questions are not uniquely Texan. On November 16, five regional grid operators are due to file responses in the Federal Energy Regulatory Commission's large-load show-cause proceedings, dockets EL26-67 through EL26-72; Southwest Power Pool follows on or about November 20. Those filings, which we have scored separately, will set out how each region proposes to study large loads, secure the cost of upgrades and offer interim or non-firm service while the wires catch up.7 The common thread with Batch Zero is proof of seriousness: deposits, security, readiness and a clearer line between a request and a load that can actually be served.
State commissions and large-load tariffs are asking the same sort of question, namely whether the customer can pay for the upgrades it triggers and whether the load is more than a placeholder. The December 10 ERCOT report will not answer those dockets. It will give buyers a public example of what happens when a grid operator reads the file behind the megawatt.
Operators and developers that can already document real megawatts (executed agreements, confirmed security, equipment with a delivery path, and a service product that is firm or whose flexibility can be priced) should be able to command a different number than a portfolio of queue positions. The audit has not yet said how many projects will clear. It has already said what "clear" has to look like.
Notes
- Greg Abbott, Governor of Texas, letter to Thomas Gleeson, Chairman, Public Utility Commission of Texas, and Pablo Vegas, President and Chief Executive Officer, Electric Reliability Council of Texas, August 3, 2026, https://gov.texas.gov/uploads/files/press/Thomas_Gleeson_Pablo_Vegas_Data_Centers_Directive_Letter_to_PUCT_ERCOT_August_2026_.pdf.↩︎
- Jeff Billo, "Item 14: Batch Zero Update," presentation to the ERCOT Board of Directors, September 14–15, 2026, https://www.ercot.com/files/docs/2026/09/11/14-Batch-Zero-Update.pdf. Key takeaways list 204 projects (66.4 GW) conditionally included as base load and 158 projects (127.9 GW) as studied load. Slide 6 of the same deck labels studied load as 125.4 GW for the same 158 projects, a figure that appears to describe the accompanying chart rather than the official takeaway; this article uses the key-takeaway totals. Excluded load of 302.2 GW across 373 projects is noted on that chart as omitted from the included-load totals. Large Loads are defined as 75 MW or greater. The presentation states that ERCOT paused approvals to energize data centers or virtual currency mining facilities of 75 MW or greater, and that "the energization pause impacts Large Load data centers and crypto facilities not yet connected to the ERCOT system." The original PGRR 145 study deadline is given as April 9, 2027, with the impact on that timeline described as still to be determined.↩︎
- Chad V. Seely, "Batch Zero Eligibility Verification Process Update," presentation to the Public Utility Commission of Texas open meeting, November 5, 2026, filed November 4, 2026, in PUC Project No. 59142, item 78, Attachment A, also posted at https://www.ercot.com/files/docs/2026/11/05/ERCOT-Verification-RFI-Update.pdf. First-round responses from 257 developers, approximately 5,140 questions; second-round RFIs expected to 80 percent of developers, with a five-business-day deadline under Planning Guide § 9.1(8); recurring issues as quoted in the text; report due to the Commission on December 10, 2026. The presentation states that ERCOT "has not completed its review."↩︎
- Chad V. Seely, letter to the Public Utility Commission of Texas, November 4, 2026, PUC Project No. 59142, Review of ERCOT's Interconnection Processes for Large Loads, item 78, https://interchange.puc.texas.gov/Documents/59142_78_1699635.PDF, transmitting Attachments A–C and noting that good-cause exception requests would be filed in time for the Commission's December 17, 2026 open meeting. The letter states that each Large Load seeking a later security-posting deadline "has now posted that security." Attachment B, "Data Center State and Community Impact RFI: Preliminary Summary" (preliminary as of November 5 and subject to change), reports the RFI issued to 465 loads, responses from 433 (93 percent) covering about 177 GW, and responses from all 245 Large Loads.↩︎
- Electric Reliability Council of Texas, "Good Cause Exceptions for PGRR 145, Batch Zero Verification and Audit Process, Community Impact Review Process," presentation to the Public Utility Commission of Texas open meeting, August 20, 2026, https://www.ercot.com/files/docs/2026/08/20/Batch-Zero-Verification-and-Audit-PUCT-Presentation.pdf. The deck states that ERCOT "has paused approvals to energize large load data centers and crypto facilities until the Batch Zero eligibility verification is complete," that ERCOT may still approve energization for non-data-center large loads, and that the pause does not apply to medium loads. It also reports "17 large loads (6,608 MW total peak demand over 5 years)" that have finished all ERCOT processes except approval to energize.↩︎
- Robert Walton, "ERCOT aims to complete Texas governor's data center audit by December," Utility Dive, August 21, 2026, https://www.utilitydive.com/news/ercot-texas-puc-data-center-audit/828472/, quoting Chad Seely at the August 20, 2026 open meeting: "We will not have the study done by April 9, 2027. I think what we're saying is, we're still working on what that new timeline might be." The same article, reporting from that earlier meeting, referred to "about 300 data centers 75 MW or larger navigating the Batch Zero process," an approximate figure that predates the September conditional classifications and is not used as a current project count in this article. Utility Dive also reported that the December 10 filing was intended to land a week before the Commission's open meeting that month. The Commission's calendar lists a December 17, 2026 open meeting, which ERCOT's November 4 letter independently references.↩︎
- Federal Energy Regulatory Commission, "FERC Launches Aggressive Targeted Action to Speed Large Load Integration," news release, June 18, 2026, https://www.ferc.gov/news-events/news/ferc-launches-aggressive-targeted-action-speed-large-load-integration (dockets EL26-67 through EL26-72). See also AIxEnergy, "Six Answers on November 16: A Developer's Scorecard for FERC's Large-Load Show-Cause Filings" (unpublished draft), which reviews the November 16 (and, for Southwest Power Pool, on or about November 20) response calendar and should be read for that scorecard; this article does not repeat it.↩︎
Bibliography
- Abbott, Greg. Letter to Thomas Gleeson and Pablo Vegas. August 3, 2026. https://gov.texas.gov/uploads/files/press/Thomas_Gleeson_Pablo_Vegas_Data_Centers_Directive_Letter_to_PUCT_ERCOT_August_2026_.pdf.
- Billo, Jeff. "Item 14: Batch Zero Update." Presentation to the ERCOT Board of Directors, September 14–15, 2026. https://www.ercot.com/files/docs/2026/09/11/14-Batch-Zero-Update.pdf.
- Electric Reliability Council of Texas. "Good Cause Exceptions for PGRR 145, Batch Zero Verification and Audit Process, Community Impact Review Process." Presentation to the Public Utility Commission of Texas open meeting, August 20, 2026. https://www.ercot.com/files/docs/2026/08/20/Batch-Zero-Verification-and-Audit-PUCT-Presentation.pdf.
- Federal Energy Regulatory Commission. "FERC Launches Aggressive Targeted Action to Speed Large Load Integration." News release, June 18, 2026. https://www.ferc.gov/news-events/news/ferc-launches-aggressive-targeted-action-speed-large-load-integration.
- Seely, Chad V. Letter to the Public Utility Commission of Texas. November 4, 2026. PUC Project No. 59142, item 78. https://interchange.puc.texas.gov/Documents/59142_78_1699635.PDF.
- Seely, Chad V. "Batch Zero Eligibility Verification Process Update." Presentation to the Public Utility Commission of Texas open meeting, November 5, 2026. https://www.ercot.com/files/docs/2026/11/05/ERCOT-Verification-RFI-Update.pdf.
- Walton, Robert. "ERCOT aims to complete Texas governor's data center audit by December." Utility Dive, August 21, 2026. https://www.utilitydive.com/news/ercot-texas-puc-data-center-audit/828472/.
