Texas Mandates Cryptomining Registration, Power Demand Reporting, to Bolster Grid Reliability
Sonal Patel
5 min read
The Public Utility Commission of Texas (PUCT) has adopted a rule for reliability purposes requiring cryptocurrency mining facilities in the Electric Reliability Council of Texas (ERCOT) region to register with the state and annually report details about their location, ownership, form of business, and demand for electricity.
The PUCT’s new rule, adopted on Nov. 21, will mandate registration for virtual currency mining facilities—defined under existing law as "a facility that uses electronic equipment to add virtual currency transactions to a distribution ledger—that have a total load of more than 75 MW and an interruptible facility load of at least 10%.
According to the PUCT, the new rule addresses the unique and growing energy demands posed by crypto-mining facilities on Texas’s grid reliability and electricity pricing. “To ensure the ERCOT grid is reliable and meets the electricity needs of all Texans, the PUCT and ERCOT need to know the location and power needs of virtual currency miners,” said PUCT Chairman Thomas Gleeson. “This is another example of the PUCT and ERCOT adapting to support a rapidly changing industrial landscape. Most importantly, we will always take the steps necessary to ensure reliable, affordable power for all Texans.”
Texas Bracing for Massive Upsurge in Large Flexible Load Demand
Texas has been bracing for a steep rise in power demand from consumers identified as large flexible loads (LFL), which are most commonly data centers, crypto mining facilities, hydrogen production facilities, and some industrial factories. ERCOT has warned that large electrical loads can pose unpredictable fluctuations when they rapidly shift their energy use, throttling power consumption up or down—or even shutting off entirely. Without ERCOT's oversight that poses serious risks to grid stability.
The U.S. Energy Information Administration (EIA) recently reported that ERCOT’s LFL could total 54 TWh in 2025—up almost 60% from expected demand in 2024.That compares to growth forecasts for load growth across all types of ERCOT customers from 464 TWh in 2024 to 487 TWh in 2025—of only 5%.
The Energy Information Administration estimates projected ERCOT energy demand from large flexible loads could surge nearly 60% by 2025, far outpacing the 5% growth forecast for overall customer load.Source: U.S. Energy Information Administration, Short-Term Energy Outlook (STEO), September 2024
The Energy Information Administration estimates projected ERCOT energy demand from large flexible loads could surge nearly 60% by 2025, far outpacing the 5% growth forecast for overall customer load. Source: U.S. Energy Information Administration, Short-Term Energy Outlook (STEO), September 2024[/caption]
“We assume that by the end of 2025, ERCOT will have approved operations of 9,500 MW of LFL demand capacity, which would be 73% more than is currently approved (5,479 MW of which 1,570 MW was approved over the past 12 months),” the agency said. That expected demand from LFL customers would represent about 10% of total forecast electricity consumption on the ERCOT grid next year, it added. “These facilities consume large amounts of electricity, both to run their computing equipment and to keep them cool. Some of the larger facilities can consume as much electricity as a medium-sized power plant,” it noted.
ERCOT has been preparing for the massive uptick in demand growth. In mid-2022, the grid operator developed a voluntary curtailment program for approved LFL customers (those with an expected peak demand capacity of 75 MW or greater) to ensure grid reliability. It also launched the Large Flexible Load Task Force (LFLTF), a non-voting body that develops policy recommendations related to planning, markets, operations, and large load interconnection processes. Earlier this year, ERCOT unveiled a “New Era of Planning” that it said was necessary given that it estimated an additional 40 GW of load growth by 2030 (over the next five years) compared to last year’s forecast.
Meanwhile, the state in November 2023 launched the Texas Energy Fund, a financing program that seeks to bolster the construction, maintenance, modernization, and operation of electric facilities in Texas. ERCOT, which serves about 90% of Texas’ grid, relied on natural gas for about 45% of its generation in 2023, but natural gas generation is slated to fall 5% in 2025 in response to increased generation from renewables, especially solar, officials have noted. A key TEF prong is the In-ERCOT Generation Loan Program, a low-interest loan and grant program of up to $7.2 billion (of a legislated total of $10 billion) for “dispatchable” generation. In August, the PUCT shortlisted 17 gas-fired “dispatchable” generation projects—a combined 9,781 MW—that will advance to receive $5.38 billion in loaned funds. That list now stands at 16 projects. The PUCT is expected to make initial disbursements for approved In-ERCOT loans by December 2025.
ERCOT is tracking 1,881 active generation interconnection requests totaling 371,689 MW as of September 30, 2024. Solar and battery projects dominate the queue, each accounting for over 41% of the total capacity (153,658 MW and 154,264 MW, respectively), followed by wind (34,839 MW, 9.4%) and gas (25,967 MW, 7%). Inactive projects increased to 103, up from 99 in August. Source: ERCOT Monthly Operational Overview, October 17, 2024.
ERCOT is tracking 1,881 active generation interconnection requests totaling 371,689 MW as of Sept. 30, 2024. Solar and battery projects dominate the queue, each accounting for over 41% of the total capacity (153,658 MW and 154,264 MW, respectively), followed by wind (34,839 MW, 9.4%) and gas (25,967 MW, 7%). Inactive projects increased to 103, up from 99 in August. Source: ERCOT Monthly Operational Overview, October 17, 2024.[/caption]
PUCT: Information Will Help ERCOT Manage Grid More Reliably
The new rule implemented by the PUCT on Thursday aligns with the legislative intent of the Public Utility Regulatory Act (PURA) Section 39.360, enacted in 2023. According to the PUCT’s order, the statute “unambiguously requires the registration of virtual currency mining facilities” as part of broader efforts to provide ERCOT with the information necessary to maintain grid stability. The rule specifically requires facilities to register if they have a total load of more than 75 MW and at least 10% of their load is classified as interruptible, a threshold the commission defined as relevant to grid reliability.
Cryptomining facilities subject to the rule must register with the PUCT by Feb. 1, 2025, if they were operating before the rule’s effective date. For facilities beginning operations after the rule’s enactment, registration is required within one working day of receiving retail electric service. Facilities that fail to comply with the rule face a Class A violation, which carries potential fines of up to $25,000 per day.
The PUCT intends to share this information with ERCOT. “The information provided in the registration will help ERCOT manage the grid reliably as more virtual currency mining facilities connect to the grid,” it said. However, the PUCT also clarified that registration data will be collected via a secure “internal-facing online tool" and that "competitively sensitive or proprietary information" will not be disclosed unless legally required.
Several industry stakeholders provided extensive feedback during the rulemaking process, the order suggests. MARA and the Texas Blockchain Council (TBC) raised issues about data confidentiality, while Satoshi Energy suggested a deregistration process for facilities repurposed for non-mining purposes (which the PUCT declined). Vistra’s proposal to withdraw and restart the rulemaking process was also rejected.
