TITLE 16. ECONOMIC REGULATION

PART 2. PUBLIC UTILITY COMMISSION OF TEXAS

CHAPTER 25. SUBSTANTIVE RULES APPLICABLE TO ELECTRIC SERVICE PROVIDERS

SUBCHAPTER C. INFRASTRUCTURE AND RELIABILITY

The Public Utility Commission of Texas (commission) proposes new 16 Texas Administrative Code (TAC) §25.63, relating to Distribution Pole Management and Inspection Plans, to implement Public Utility Regulatory Act (PURA) §38.103, as enacted by House Bill 144 during the 89th Regular Texas Legislative Session.

New 16 TAC §25.63 will require each electric utility, municipally owned utility, and electric cooperative that owns or operates a distribution asset in this state to file with the commission a distribution pole management and inspection plan and an annual compliance update.

Growth Impact Statement

The agency provides the following governmental growth impact statement for the proposed rule, as required by Texas Government Code §2001.0221. The agency has determined that for each year of the first five years that the proposed rule is in effect, the following statements will apply:

(1) the proposed rule will not create a government program and will not eliminate a government program;

(2) implementation of the proposed rule will not require the creation of new employee positions and will not require the elimination of existing employee positions;

(3) implementation of the proposed rule will not require an increase and will not require a decrease in future legislative appropriations to the agency;

(4) the proposed rule will not require an increase and will not require a decrease in fees paid to the agency;

(5) the proposed rule will create a new regulation;

(6) the proposed rule will not expand, limit, or repeal an existing regulation;

(7) the proposed rule will not change the number of individuals subject to the rule's applicability; and

(8) the proposed rule will not affect this state's economy.

Fiscal Impact on Small and Micro-Businesses and Rural Communities

There is no adverse economic effect anticipated for small businesses, micro-businesses, or rural communities as a result of implementing the proposed rule. Accordingly, no economic impact statement or regulatory flexibility analysis is required under Texas Government Code §2006.002(c).

Takings Impact Analysis

The commission has determined that the proposed rule will not be a taking of private property as defined in chapter 2007 of the Texas Government Code.

Fiscal Impact on State and Local Government

James Euton, Project Engineer, Infrastructure Division, has determined that for the first five-year period the proposed rule is in effect, there will be no fiscal implications for the state or for units of local government under Texas Government Code §2001.024(a)(4) as a result of enforcing or administering the sections.

Public Benefits

Mr. Euton has determined that for each year of the first five years the proposed section is in effect the public benefit anticipated as a result of enforcing the section will be the enhancement of public transparency into the planning, management, and inspection processes of electric utilities, municipally owned utilities, and electric cooperatives, as related to distribution poles. There will be no probable economic cost to persons required to comply with the rule under Texas Government Code §2001.024(a)(5).

Local Employment Impact Statement

For each year of the first five years the proposed section is in effect, there should be no effect on a local economy; therefore, no local employment impact statement is required under Texas Government Code §2001.022.

Costs to Regulated Persons

Texas Government Code §2001.0045(b) does not apply to this rulemaking because the commission is expressly excluded under subsection §2001.0045(c)(7).

Public Hearing

Commission staff will conduct a public hearing on this rulemaking if requested in accordance with Texas Government Code §2001.029. The request for a public hearing must be received by April 27, 2026. If a request for public hearing is received, commission staff will file in this project a notice of hearing.

Public Comments

Interested persons may file comments electronically through the interchange on the commission's website. Comments must be filed by April 27, 2026. Comments should be organized in a manner consistent with the organization of the proposed rule. The commission invites specific comments regarding the costs associated with, and benefits that will be gained by, implementation of the proposed rule. The commission will consider the costs and benefits in deciding whether to modify the proposed rule on adoption. All comments should refer to Project Number 59431.

Each set of comments should include a standalone executive summary as the last page of the filing. This executive summary must be clearly labeled with the submitting entity's name and should include a bulleted list covering each substantive recommendation made in the comments.

Statutory Authority

The new rule is proposed under Public Utility Regulatory Act (PURA) §§14.001, which grants the commission the general power to regulate and supervise the business of each public utility within its jurisdiction and to do anything specifically designated or implied by this title that is necessary and convenient to the exercise of that power and jurisdiction; 14.002, which authorizes the commission to adopt and enforce rules reasonably required in the exercise of its powers and jurisdiction; and 38.103, which requires each electric utility, municipally owned utility, and electric cooperative that distributes electric energy to the public to submit to the commission a plan for the management and inspection of distribution poles the cooperative or utility owns in the cooperative's or utility's distribution system.

Cross Reference to Statute: Public Utility Regulatory Act §§14.001; 14.002; and 38.103.

§25.63. Distribution Pole Management and Inspection Plans.

(a) Applicability. This section applies to each electric utility, municipally owned utility, and electric cooperative that owns or operates a distribution asset in this state.

(b) Definition. Entity--An electric utility, a municipally owned utility, or an electric cooperative operating in this state.

(c) Distribution pole management and inspection plan. An entity that owns or operates a distribution asset in this state must file with the commission a plan for the management and inspection of distribution poles according to the requirements of this subsection.

(1) Filing requirements.

(A) Initial plan. By January 1, 2027, an entity must file an initial plan in a control number designated for this purpose by commission staff.

(B) Subsequent plans.

(i) By January 1, 2028, an entity must file, in the control number designated under subparagraph (A) of this paragraph:

(I) An affidavit that the entity's initial plan complies with the transmission and distribution pole structural integrity standards adopted by the commission under Public Utility Regulatory Act (PURA) §38.006; or

(II) A revised plan that complies with the transmission and distribution pole structural integrity standards adopted by the commission under PURA §38.006.

(ii) After January 1, 2028:

(I) an electric utility must file a revised plan by January 1 of every eighth year, starting January 1, 2032; and

(II) a municipally owned utility must file a revised plan by January 1 of every eighth year, starting January 1, 2034; and

(III) an electric cooperative must file a revised plan by January 1 of every eighth year, starting January 1, 2036.

(C) An entity must file a plan as a searchable pdf document and in Microsoft Excel format for all included tables, with formulas intact.

(2) Contents. An entity's plan must contain:

(A) A statement of the plan's scope and objectives for ensuring public safety through the effective management, inspection, maintenance, and repair of distribution poles;

(B) A description of the roles and responsibilities of individuals responsible for overseeing and executing the plan;

(C) A description of the entity's processes for training and certifying personnel, including third-party vendors, who inspect distribution poles;

(D) An estimated timeline for completing inspections and remedial action required for any distribution pole identified as unreliable, unsafe, or needing repair that is consistent with the transmission and distribution pole structural integrity standards adopted by the commission under PURA §38.006;

(E) A description of the entity's processes for documenting and responding to a report or complaint made by a landowner regarding the condition or repair of a distribution pole;

(F) For a plan submitted by an electric utility, the estimated cost of implementing the plan; and

(G) A description of the entity's methods for monitoring compliance with the plan.

(3) Substantially similar information. A municipally owned utility or an electric cooperative may fulfill the requirements of paragraph (2) of this subsection by submitting any information required under other law that is substantially similar to the information required by paragraph (2) of this subsection. A municipally owned utility or an electric cooperative must clearly identify in its plan the requirement the submitted information is intended to fulfill and include a description of why the submitted information is substantially similar to that requirement.

(d) Annual compliance update. An entity with a plan on file with the commission under subsection (c) of this section must file an annual compliance update not later than May 1 of each year.

(1) Filing requirements.

(A) An entity must file the annual compliance update in a control number or other filing method designated for this purpose by commission staff. The update must be filed as a searchable pdf document and in Microsoft Excel format for all included tables, with formulas intact.

(B) An electric utility's annual compliance update must include both the information required under paragraph (2) of this subsection and the information required under §25.94, relating to Report on Infrastructure Improvement and Maintenance. The filing must clearly identify and delineate the information that is responsive to the requirements of paragraph (2) of this subsection and §25.94, respectively.

(2) Contents. An entity's annual compliance update must include:

(A) A detailed description of the entity's compliance with the plan objectives reported under subsection (c)(2)(A) of this section;

(B) the actual costs of implementing the plan to date, presented as a total and by compliance year; and

(i) the total number of poles inspected, presented as a number and a percentage of the entity's total number of distribution poles;

(ii) the number of poles inspected and identified as needing remediation, accompanied by an indication of the necessary remedial action and the entity's progress towards completing the action (i.e., planned, in-progress, delayed, and completed) for each pole;

(iii) the number of poles inspected and identified as needing replacement, accompanied by an indication of the entity's progress (i.e., planned, in-progress, delayed, and completed) towards replacing each pole; and

(iv) the number of poles inspected and identified as a danger pole, accompanied by an indication of the entity's progress (i.e., planned, in-progress, delayed, and completed) towards making safe and replacing each pole.

(e) Compliance review. Commission staff will review each entity's plan and annual compliance update to determine compliance with the plan objectives under subsection (c)(2)(A) of this section and issue notice of its determination to the submitting entity and to the commission.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on March 12, 2026.

TRD-202601173

Katelyn Lewis

Rules Coordinator

Public Utility Commission of Texas

Earliest possible date of adoption: April 26, 2026

For further information, please call: (512) 936-7044

SUBCHAPTER I. TRANSMISSION AND DISTRIBUTION

DIVISION 1. OPEN-ACCESS COMPARABLE TRANSMISSION SERVICE FOR ELECTRIC UTILITIES IN THE ELECTRIC RELIABILITY COUNCIL OF TEXAS

16 TAC §25.194

The Public Utility Commission of Texas (commission) proposes new 16 Texas Administrative Code (TAC) §25.194 relating to Large Load Interconnection Standards. This proposed rule will implement Public Utility Regulatory Act (PURA) §37.0561, as enacted by Senate Bill (SB) 6 during the Texas 89th Regular Legislative Session. The new rule will implement new PURA §37.0561, which requires the commission to establish standards for interconnecting large load customers in the ERCOT power region in a manner designed to support business development in this state while minimizing the potential for stranded infrastructure costs and maintaining system reliability. The new rule will require a large load customer, before the large load customer can be included in an ERCOT interconnection study, to execute an intermediate agreement that requires the large load customer to provide certain disclosures and post financial security in the amount of $100,000 per megawatt (MW). The new rule will also require a large load customer, not later than 30 days after ERCOT completes the interconnection study, to execute an interconnection agreement that requires the large load customer to update its disclosures, pay a non-refundable interconnection fee in the amount of $100,000 per MW; post financial security for significant equipment or services; pay contribution in aid of construction for direct interconnection costs; and post financial security for system upgrades. Additionally, the new rule will set forth the consequences of withdrawing all or a portion of requested peak demand or contracted peak demand and the consequences of failing to satisfy a milestone in the large load customer's schedule for phased energization. Finally, the new rule will set forth the terms for refund of financial security for a large load customer that energizes.

Growth Impact Statement

(1) the proposed rule will not create a government program and will not eliminate a government program;

(2) implementation of the proposed rule will not require the creation of new employee positions and will not require the elimination of existing employee positions;

(3) implementation of the proposed rule will not require an increase and will not require a decrease in future legislative appropriations to the agency;

(4) the proposed rule will not require an increase and will not require a decrease in fees paid to the agency;

(5) the proposed rule will not create a new regulation;

(6) the proposed rule will not expand, limit, or repeal an existing regulation;

(7) the proposed rule will not change the number of individuals subject to the rule's applicability; and

(8) the proposed rule will not affect this state's economy.

Fiscal Impact on Small and Micro-Businesses and Rural Communities

Takings Impact Analysis

The commission has determined that the proposed rule will not be a taking of private property as defined in chapter 2007 of the Texas Government Code.

Fiscal Impact on State and Local Government

Jessie Horn, Sr. Counsel, Rules and Projects Division, has determined that for the first five-year period the proposed rule is in effect, there will be no fiscal implications for the state or for units of local government under Texas Government Code §2001.024(a)(4) as a result of enforcing or administering the sections.

Public Benefits

Ms. Horn has determined that for each year of the first five years the proposed section is in effect the public benefit anticipated as a result of enforcing the section will be increased transparency and support of business development. There will be a probable economic cost to persons required to comply with the rule under Texas Government Code §2001.024(a)(5) because PURA §37.0561, which the rule implements, requires large load customers to make financial commitments.

Local Employment Impact Statement

Costs to Regulated Persons

Texas Government Code §2001.0045(b) does not apply to this rulemaking because the commission is expressly excluded under subsection §2001.0045(c)(7).

Public Hearing

Commission staff will conduct a public hearing on this rulemaking if requested in accordance with Texas Government Code §2001.029. The request for a public hearing must be received by April 17, 2026. If a request for public hearing is received, commission staff will file in this project a notice of hearing.

Public Comments

Interested persons may file comments electronically through the interchange on the commission's website or by submitting a paper copy to Central Records, Public Utility Commission of Texas, 1701 North Congress Avenue, P.O. Box 13326, Austin, Texas 78711-3326. Initial comments must be filed by April 17, 2026. Comments should be organized in a manner consistent with the organization of the proposed rules. The commission invites specific comments regarding the costs associated with, and benefits that will be gained by, implementation of the proposed rule. The commission will consider the costs and benefits in deciding whether to modify the proposed rules on adoption. All comments should refer to Project Number 58481.

Statutory Authority

The new rule is proposed under Public Utility Regulatory Act (PURA) §14.001, which grants the commission the general power to regulate and supervise the business of each public utility within its jurisdiction and to do anything specifically designated or implied by this title that is necessary and convenient to the exercise of that power and jurisdiction; §14.002, which authorizes the commission to adopt and enforce rules reasonably required in the exercise of its powers and jurisdiction; §35.004, which requires the commission to ensure that a large load customer who is subject to the standards adopted under PURA §37.0561 contributes to the recovery of the interconnecting electric utility's costs to interconnect the large load customer to the utility's system; §37.0561, which requires the commission to establish standards for interconnecting large load customers in the ERCOT power region in a manner designed to support business development in this state while minimizing the potential for stranded infrastructure costs and maintaining system reliability; and §39.151, which grants the commission authority to oversee ERCOT.

Cross Reference to Statute: Public Utility Regulatory Act §14.002; §14.002; §35.004; §37.0561; §39.151.

§25.194. Large Load Interconnection Standards.

(a) Purpose and Scope. This section sets forth the standards and criteria for an electric utility, a municipally owned utility, and electric cooperative to interconnect a large load customer to the ERCOT system. Nothing in this section limits the authority of a municipally owned utility or an electric cooperative to impose electric service requirements for large load customers on their systems in addition to the standards adopted under this section.

(b) Applicability. This section applies to a large load customer that seeks:

(1) a new interconnection that is equal to or exceeds 75 megawatts (MW);

(2) an expanded interconnection that equals or exceeds 75 MW for the first time; and

(3) an expanded interconnection that exceeds 75 MW by 75 MW or more.

(c) Definitions. The following words and terms, when used in this section, have the following meanings unless the context indicates otherwise:

(1) Backup generating facilities--Generation facilities or energy storage facilities that are not capable of operating, or are not configured to operate, in parallel with the ERCOT system and cannot export energy to the ERCOT system.

(2) Competitively sensitive information--Competitively sensitive information includes exact site locations, such as parcel identifiers or property boundaries; commercial terms, such as pricing or internal development prioritization; proprietary architectural, operational, or compute-deployment strategies; and financing structures. Competitively sensitive information does not include the identity of a large load customer; general site location, such as load zone; requested or contracted peak demand; timing of energization; or whether an interconnection request is associated with the same applicant or affiliated entities.

(3) Contracted peak demand--The total non-coincident peak demand that a large load customer requests that an interconnecting DSP or an interconnecting TSP serve at a site as stated interconnection agreement.

(4) Interconnecting distribution service provider (DSP)--The electric utility, municipally owned utility, or electric cooperative that is certificated to provide retail electric delivery service at the location in which the large load customer seeks to interconnect.

(5) Interconnecting transmission service provider (TSP)--The electric utility, municipally owned utility, or electric cooperative that owns and operates the facilities necessary to interconnect the large load customer to the ERCOT system.

(6) Interconnection agreement--An agreement that is executed by a large load customer, the interconnecting DSP, and, if different from the interconnecting DSP, the interconnecting TSP after completion of the interconnection study and that, at a minimum, satisfies subsection (f) of this section.

(7) Interconnection study--The set of studies that are required by ERCOT before a large load customer may be interconnected.

(8) Intermediate agreement--An agreement that is executed by a large load customer, the interconnecting DSP, and, if different from the interconnecting DSP, the interconnecting TSP before the interconnection study are initiated and that, at a minimum, satisfies subsection (d) of this section.

(9) Large load customer--An entity requesting a new or expanded interconnection where the customer's total expected non-coincident peak demand at a single site is equal to or exceeds 75 MW.

(10) Requested peak demand--The total non-coincident peak demand that a large load customer requests, prior to executing an interconnection agreement, that an interconnecting DSP or an interconnecting TSP serve at a site.

(d) Intermediate agreement. Before a large load interconnection request is submitted to ERCOT for study, the large load customer must execute an intermediate agreement with the interconnecting DSP and, if different from the interconnecting DSP, the interconnecting TSP. If the interconnecting DSP and the interconnecting TSP are different entities, the intermediate agreement must specifically identify each entity's responsibilities under this section, including which entity will accept the study fee and financial security from the large load customer. The intermediate agreement must meet the requirements of this subsection.

(1) Site control. A large load customer must demonstrate site control for the proposed load location through provision of one of the following property interests to the interconnecting DSP or the interconnecting TSP:

(A) a signed and executed lease agreement for one or more parcels of land sufficient to accommodate the customer's planned facilities at the proposed load location for a duration of at least five years from the date the large load customer is expected to reach the contracted peak demand;

(B) a deed for one or more parcels of land sufficient to accommodate the customer's planned facilities at the proposed load location; or

(C) a signed and executed agreement with an option to purchase or lease one or more parcels of land sufficient to accommodate the customer's planned facilities at the proposed location.

(2) Substantially similar interconnection request. A large load customer must disclose to the interconnecting DSP or the interconnecting TSP whether the customer is pursuing a substantially similar interconnection request for electric service, the approval of which would result in the customer materially changing, delaying, or withdrawing the interconnection request. A material change or delay includes a delay of one or more years to the project's projected date to realize its requested or contracted peak demand, a 20% or greater change in the requested or contracted peak demand, or a change in the location for the point of interconnection.

(A) A large load customer that is pursuing a substantially similar interconnection request for electric service the approval of which would result in the customer materially changing, delaying, or withdrawing the interconnection request must disclose the following information to the interconnecting DSP or the interconnecting TSP:

(i) the ERCOT-assigned serial number (i.e., the large load interconnection number) for the substantially similar interconnection request, as applicable;

(ii) the location, including the power region and, if in the ERCOT region, the load zone, of the substantially similar interconnection request;

(iii) the non-coincident peak demand of the substantially similar interconnection request;

(iv) the anticipated timing of energization of the substantially similar interconnection request; and

(v) the interconnecting DSP and, if different from the interconnecting DSP, the interconnecting TSP associated with the substantially similar interconnection request.

(B) A large load customer that discloses a substantially similar interconnection request under this subsection may anonymize competitively sensitive information in its disclosure to the interconnecting DSP or the interconnecting TSP.

(C) An interconnecting DSP and an interconnecting TSP must not sell, share, or disclose information submitted to the interconnecting DSP or the interconnecting TSP under this subsection other than a disclosure to the commission or ERCOT.

(D) ERCOT may request and the large load customer must provide any competitively sensitive information ERCOT deems necessary to complete any analysis required as part of the interconnection process. ERCOT must treat disclosed competitively sensitive information as Protected Information under ERCOT protocols.

(3) Site-related studies and engineering services. A large load customer must submit to the interconnecting DSP or the interconnecting TSP the large load customer's plans, expected timing, and progress for site-related studies and engineering services required for project development before energization (e.g., geotechnical survey, water, wastewater, or gas). The submission must be accompanied by an attestation by an officer or official with binding authority over the large load customer stating that the information contained in the submission is complete and accurate at the time the attestation is signed. A large load customer must provide updates or progress reports to the interconnecting DSP or the interconnecting TSP when requested, but no more frequently than quarterly.

(4) State and local regulatory approvals. A large load customer must submit to the interconnecting DSP or the interconnecting TSP the large load customer's plans, expected timing, and current progress for obtaining non-ministerial discretionary approvals from state and local regulatory authorities required for development before energization (e.g., water, air, or backup generation permits). The submission must be accompanied by an attestation by an officer or official with binding authority over the large load customer attesting that the information contained in the submission is complete and accurate at the time the attestation is signed. A large load customer must provide updates or progress reports to the interconnecting DSP or the interconnecting TSP when requested, but no more frequently than quarterly.

(5) Schedule for phased energization of contracted peak demand. A large load customer must disclose to the interconnecting DSP or the interconnecting TSP the expected schedule, including the quarter and year, for phased energization of the contracted peak demand expressed in MW, power factor (PF), and megavolt-ampere reactive (MVAr) units.

(6) Backup generating facilities. A large load customer must disclose to the interconnecting DSP or the interconnecting TSP whether the customer plans to have on-site backup generating facilities. If the large load customer plans to have on-site backup generating facilities, the large load customer must also disclose the following information:

(A) the number of backup generating units;

(B) the nameplate capacity of each of the backup generating facilities;

(C) the fuel source and operational characteristics of each of the backup generating facilities, including any run hour limitations and any fuel storage limitations under the existing environmental permits; and

(D) how quickly each of the backup generating facilities can reach their full capacity to serve the load.

(7) Power supply. A large load customer must disclose how it plans to procure power and whether the large load customer has on-site generation that will provide power exclusively to the large load customer.

(8) Controllable load. A large load customer must disclose whether it can be modeled as a controllable load resource, as the term is defined in ERCOT protocols, in ERCOT's study.

(9) Study fee. A large load customer must pay a study fee to the interconnecting DSP or the interconnecting TSP for the costs to conduct the interconnection study.

(A) A large load customer with requested peak demand that is equal to or greater than 75MW and less than 250MW must pay a study fee not less than $100,000 to the interconnecting DSP or the interconnecting TSP for transmission studies performed by the interconnecting DSP, the interconnecting TSP, and ERCOT, as applicable.

(B) A large load customer with requested peak demand that is equal to or greater than 250 MW must pay a study fee not less than $300,000 to the interconnecting DSP or the interconnecting TSP for transmission studies performed by the interconnecting DSP, the interconnecting TSP, and ERCOT, as applicable.

(i) The annual adjustment will be proportional to the third quarter percentage change in the national Consumer Price Index (CPI) published by the United States Department of Labor, Bureau of Labor Statistics.

(ii) The executive director must designate a substitute index to be used as a reference for adjustments if the CPI becomes unavailable.

(D) If the interconnecting DSP, the interconnecting TSP, and ERCOT's combined costs to conduct the interconnection study exceeds the applicable study fee, the large load customer must pay the actual costs to conduct the interconnection study.

(E) The interconnecting DSP or the interconnecting TSP must remit payment to ERCOT, on behalf of the large load customer, for ERCOT's costs to conduct the interconnection study.

(10) Financial security on a dollar per MW basis. Financial security under this subsection is due at the time that the intermediate agreement is executed. A large load customer must post financial security with the interconnecting DSP or the interconnecting TSP in the amount of $50,000 per MW of the requested peak demand for new interconnection requests or of the incremental increase in the peak demand for expanded interconnection requests.

(A) Beginning in 2027, the commission will adjust the $50,000 value on January 1 every five years.

(ii) The executive director must designate a substitute index to be used as a reference for adjustments if the CPI becomes unavailable.

(B) The interconnecting DSP or the interconnecting TSP may accept the following forms of financial security:

(i) cash collateral;

(ii) corporate or parental guaranty, only if the corporation or parent corporation has a credit rating equivalent of BBB-/Baa3 or higher from Standard & Poor's or Moody's; or

(iii) a letter of credit issued by a major U.S. commercial bank, or a U.S. branch office of a major foreign commercial bank, with a credit rating of at least "A-" by Standard & Poor's or "A3" by Moody's Investor Service.

(C) If the large load customer provides a corporate or parental guaranty under this subsection, the interconnecting DSP or the interconnecting TSP may require the submission of financial records or statements to determine the customer's financial stability.

(D) Refund of financial security posted on a dollar per MW basis is subject to subsection (g) of this section.

(11) Financial security for significant equipment or services. An interconnecting DSP and an interconnecting TSP must not procure equipment or services before a large load customer posts financial security to the interconnecting DSP or the interconnecting TSP in an amount equal to the interconnecting DSP and interconnecting TSP's estimated costs for equipment with a lead time of at least six months and services necessary to interconnect the large load customer.

(A) A large load customer may elect to amend its intermediate agreement with the interconnecting DSP and the interconnecting TSP to post financial security for significant equipment or services prior to executing an interconnection agreement.

(B) An interconnecting DSP or an interconnecting TSP must apply any unused study fee that the large load customer paid under an intermediate agreement to satisfy the financial security for significant equipment or services under this subsection.

(C) The interconnecting DSP or the interconnecting TSP may accept the following forms of financial security for significant equipment or services:

(i) cash collateral;

(ii) corporate or parental guaranty, only if the corporation or parent corporation has a credit rating equivalent of BBB-/Baa3 or higher from Standard & Poor's or Moody's; or

(D) If the large load customer provides a corporate or parental guaranty under this subsection, the interconnecting DSP or the interconnecting TSP may require the submission of financial records or statements to determine the customer's financial stability.

(E) Refund of financial security posted for significant equipment or services is subject to subsections (g) through (i) of this section.

(e) Interconnection study. Not later than 60 days after an intermediate agreement is executed under subsection (d) of this section, the interconnecting DSP or the interconnecting TSP must coordinate with ERCOT to initiate an interconnection study.

(1) The interconnecting DSP or the interconnecting TSP must notify the large load customer when the interconnecting DSP or the interconnecting TSP coordinates with ERCOT to initiate a interconnection study.

(2) The interconnecting DSP or the interconnecting TSP must notify the large load customer when the interconnection study commences and concludes.

(3) The interconnecting DSP or the interconnecting TSP must provide a large load customer timely information related to communications that the interconnecting DSP or the interconnecting TSP receives from ERCOT about the large load customer's interconnection request.

(4) A large load customer that requests additional capacity following the initiation of the interconnection study must submit a new interconnection request to the interconnecting DSP or the interconnecting TSP.

(f) Interconnection agreement. Not later than 30 days after completion of the interconnection study for a large load customer, the large load customer must execute an interconnection agreement with the interconnecting DSP and, if different from the interconnecting DSP, the interconnecting TSP. If the interconnecting DSP and the interconnecting TSP are different entities, the interconnection agreement must specifically identify each entity's responsibilities under this section, including which entity will accept financial security and CIAC from the large load customer. The interconnection agreement must meet the requirements of this subsection. The interconnecting DSP or the interconnecting TSP must cancel the interconnection request and notify ERCOT of the cancellation if the large load customer fails to execute an interconnection agreement under this subsection within 30 days of receipt of the interconnecting DSP or the interconnecting TSP's notice to the large load customer that all necessary transmission studies as defined in ERCOT protocols to interconnect the large load customer have been completed.

(1) Site control. A large load customer must demonstrate site control for the load location through provision of one of the following property interests to the interconnecting DSP or the interconnecting TSP:

(A) a signed and executed lease agreement for one or more parcels of land sufficient to accommodate the customer's planned facility at the proposed load location for a duration of at least five years from the date that the large load customer is expected to reach the contracted peak demand;

(B) a deed for one or more parcels of land sufficient to accommodate the customer's planned facility at the proposed load location; or

(2) Substantially similar request. A large load customer must disclose to the interconnecting DSP or the interconnecting TSP whether the customer is pursuing a substantially similar interconnection request for electric service, the approval of which would result in the customer materially changing, delaying, or withdrawing the interconnection request. A material change or delay includes a delay of one or more years to the project's projected date to realize its requested or contracted peak demand, a 20% or greater change in the requested or contracted peak demand, or a change in the location for the point of interconnection.

(A) A large load customer that is pursuing a substantially similar interconnection request for electric service, the approval of which would result in the customer materially changing, delaying, or withdrawing the interconnection request must disclose the following information to the interconnecting DSP or the interconnecting TSP:

(i) the ERCOT-assigned serial number (i.e., the large load interconnection number) for the substantially similar interconnection request, as applicable;

(ii) the location, including the power region and if in the ERCOT region the load zone, of the substantially similar interconnection request;

(iii) the non-coincident peak demand of the substantially similar interconnection request;

(iv) the anticipated timing of energization of the substantially similar interconnection request; and

(v) the interconnecting DSP and, if different from the interconnecting DSP, the interconnecting TSP associated with the substantially similar interconnection request.

(B) A large load customer that discloses a substantially similar interconnection request under this subsection may anonymize the competitively sensitive information in its disclosure to the interconnecting DSP or the interconnecting TSP.

(3) Site-related studies and engineering services. A large load customer must submit to the interconnecting DSP or the interconnecting TSP the large load customer's plans, expected timing, and progress for site-related studies and engineering services required for project development before energization (e.g., geotechnical survey, water, wastewater, or gas). The submission must be accompanied by an attestation by an officer or official with binding authority over the large load customer attesting that the information contained in the submission is complete and accurate at the time the attestation is signed. A large load customer must provide updates or progress reports to the interconnecting DSP or the interconnecting TSP when requested, but no more frequently than quarterly.

(5) Schedule for phased energization of contracted peak demand. A large load customer must disclose to the interconnecting DSP or the interconnecting TSP the expected schedule, including the month and year, for phased energization of the contracted peak demand expressed in MW, PF, and MVAr units.

(A) the number of backup generating facilities;

(B) the nameplate capacity of each of the backup generating facilities;

(C) the fuel source and operational characteristics of each of the backup generating facilities, including any run hour limitations under the existing environmental permits; and

(D) how quickly each of the backup generating facilities can reach their full capacity to serve the load.

(7) Non-refundable interconnection fee. A large load customer must pay an interconnection fee in the amount of $50,000 per MW of contracted peak demand. An interconnection fee under this subsection is non-refundable.

(A) An interconnecting DSP or an interconnecting TSP must draw on any unused financial security that the large load customer posted under an intermediate agreement to satisfy the interconnection fee under this subsection.

(B) An interconnection fee under this subsection must be paid to the interconnecting TSP and applied by that TSP as an offset to the interconnecting TSP's rate base in the earlier of the interconnecting TSP's next interim rate proceeding or comprehensive rate proceeding.

(8) Financial security for significant equipment or services. A large load customer must post financial security for significant equipment or services not later than the date that the interconnection agreement is executed if the interconnecting DSP or the interconnecting TSP needs to procure significant equipment or services to interconnect the large load customer. An interconnecting DSP and an interconnecting TSP must not procure equipment or services before a large load customer posts financial security to the interconnecting DSP or the interconnecting TSP in an amount equal to the interconnecting DSP and interconnecting TSP's estimated costs for equipment with a lead time of at least six months and services necessary to interconnect the large load customer.

(A) An interconnecting DSP or an interconnecting TSP must apply any unused study fee that the large load customer paid under an intermediate agreement to satisfy the financial security for significant equipment or services under this subsection.

(B) After drawing down on financial security posted under an intermediate agreement for payment of the interconnection fee, an interconnecting DSP or an interconnecting TSP must apply the balance of any unused financial security that the large load customer posted under an intermediate agreement to satisfy the financial security for significant equipment or services under this subsection.

(C) The interconnecting DSP or the interconnecting TSP may accept the following forms of financial security for significant equipment or services:

(i) cash collateral;

(ii) corporate or parental guaranty, only if the corporation or parent corporation has a credit rating equivalent of BBB-/Baa3 or higher from Standard & Poor's or Moody's; or

(E) Refund of financial security posted for significant equipment or services is subject to subsections (g) through (i) of this section.

(9) Contribution in aid of construction (CIAC). A large load customer must pay all direct interconnection costs through CIAC, with no standard or other allowance offered to offset the customer's CIAC payments. A large load customer must pay CIAC not later than the date that the interconnection agreement is executed. An interconnecting DSP and interconnecting TSP must not begin construction of facilities to interconnect a large load customer before a large load customer pays CIAC in an amount that is equal to the direct interconnection costs associated with the large load customer.

(A) Direct interconnection costs include all costs associated with facilities built to interconnect the large load customer to the existing ERCOT system, including radial lines and substation upgrades necessary to interconnect the new large load customer. CIAC must be paid in the form of a direct cash payment.

(B) An interconnecting DSP and an interconnecting TSP must not seek to recover any large load-related direct interconnection costs, including any interconnection allowance for large load customers, under any rates regulated by the commission.

(C) The CIAC must be trued-up to reflect the actual costs once the facilities are completed, and a customer may receive a credit or surcharge on their bill, as applicable, for the difference in actual costs relative to the estimate.

(10) Financial security for system upgrades. A large load customer must post financial security for system upgrades that are necessary to reliably serve the large load customer not later than the date that the interconnection agreement is executed.

(A) The interconnecting DSP or the interconnecting TSP may accept the following forms of financial security for system upgrades:

(i) cash collateral;

(ii) corporate or parental guaranty, only if the corporation or parent corporation has a credit rating equivalent of BBB-/Baa3 or higher from Standard & Poor's or Moody's; or

(B) If the large load customer provides a corporate or parental guaranty under this subsection, the interconnecting DSP or the interconnecting TSP may require the submission of financial records or statements to determine the customer's financial stability.

(g) Withdrawal of all or a portion of requested peak demand or contracted peak demand. A large load customer may withdraw all or a portion of its requested peak demand or contracted peak demand for interconnection by submitting its request in writing to the interconnecting DSP or the interconnecting TSP.

(1) Not later than 14 days after receipt of a large load customer's notice to withdraw all or a portion of requested peak demand or contracted peak demand for interconnection, the interconnecting DSP or the interconnecting TSP must notify ERCOT via a method prescribed by ERCOT.

(2) The interconnecting DSP or the interconnecting TSP must draw down on the large load customer's financial security and apply the financial security to any outstanding amounts owed. Outstanding amounts owed include the following:

(A) costs incurred by the interconnecting DSP or the interconnecting TSP to fulfill the large load customer's request for interconnection;

(B) costs for equipment that the interconnecting DSP or the interconnecting TSP procured and that cannot be canceled with a full refund;

(C) costs for construction that the interconnecting DSP or the interconnecting TSP started and that cannot be canceled with a full refund; and

(D) costs for services that the interconnecting DSP or the interconnecting TSP initiated and that cannot be canceled with a full refund.

(3) After applying the large load customer's financial security to any outstanding amounts owed, the interconnecting DSP or the interconnecting TSP must refund 20% of the balance to the large load customer within 60 days.

(4) After applying the financial security to any outstanding amounts owed and refunding 20% of the balance, the remaining 80% of the balance must be paid to the interconnecting TSP and applied by that TSP as an offset to the interconnecting TSP's rate base in the earlier of the interconnecting TSP's next interim rate proceeding or comprehensive rate proceeding.

(5) CIAC is not refundable.

(6) ERCOT must reallocate contracted peak demand that is withdrawn by a large load customer.

(h) Non-utilized capacity.

(1) Not later than 30 days after a large load customer fails, by 6 months, to satisfy a milestone in its schedule for phased energization, the interconnecting DSP or the interconnecting TSP must notify ERCOT of the large load customer's non-utilized capacity.

(2) Within 60 days of providing notice to ERCOT under this subsection, the interconnecting DSP or the interconnecting TSP must draw down on the large load customer's financial security and apply the financial security to any outstanding amounts owed. Outstanding amounts owed include the following:

(A) costs incurred by the interconnecting DSP or the interconnecting TSP to fulfill the large load customer's request for interconnection;

(B) costs for equipment that the interconnecting DSP or the interconnecting TSP procured and that cannot be canceled with a full refund;

(C) costs for construction that the interconnecting DSP or the interconnecting TSP started and that cannot be canceled with a full refund; and

(D) costs for services that the interconnecting DSP or the interconnecting TSP initiated and that cannot be canceled with a full refund.

(3) Within 60 days of providing notice to ERCOT under this subsection and after applying the large load customer's financial security to any outstanding amounts owed, the interconnecting DSP or the interconnecting TSP must refund 20% of the balance to the large load customer.

(5) CIAC is not refundable.

(6) ERCOT must reallocate non-utilized capacity.

(i) Terms for refund of financial security for a large load customer that energizes. An interconnecting DSP or an interconnecting TSP must draw down on the large load customer's financial security and apply the financial security to any outstanding amounts owed for costs incurred by the interconnecting DSP or the interconnecting TSP to fulfill the large load customer's request for interconnection of the contracted peak demand.

(1) After applying financial security to any outstanding amounts owed, the interconnecting DSP or the interconnecting TSP must refund 20% of the remaining balance when the large load customer energizes and ratably as the large load customer meets the milestones identified in the customer's schedule for phased energization of its contracted peak demand.

(2) The interconnecting DSP or the interconnecting TSP must refund any remaining balance when the large load customer sustains operations for five years at the customer's contracted peak demand.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on March 12, 2026.

TRD-202601174

Katelyn Lewis

Rules Coordinator

Public Utility Commission of Texas

Earliest possible date of adoption: April 26, 2026

For further information, please call: (512) 936-7044