As Texas faces growing concerns over the stability of its power grid, particularly during peak energy demand, state legislators have moved forward with legislation aimed at regulating large energy users. Senate Bill 6, which is slated to pass in June 2025, seeks to manage the energy consumption of major industries—including data centers, cryptocurrency miners, and large manufacturing facilities—while simultaneously ensuring that residents and small businesses do not bear the burden of these industries’ energy usage.
The bill is a response to ongoing challenges within the Texas power grid, which is operated by the Electric Reliability Council of Texas (ERCOT). Following the winter storm disaster of February 2021, when millions of Texans were left without power for days, it became clear that the state’s grid was under considerable strain, especially with the increasing demand from large industrial consumers. SB 6 is designed to address this challenge by holding major energy users accountable and ensuring that their power consumption does not outpace the state’s ability to supply electricity to its residents.
The Growing Impact of Large Energy Consumers
Over the past decade, Texas has become a global hub for data centers, cryptocurrency mining operations, and other energy-intensive industries. As the state’s economy continues to grow, so too does the demand for electricity. ERCOT has estimated that energy consumption from large industrial users, particularly data centers and cryptocurrency miners, will increase by more than 50% by 2030.
Data centers, which support the digital infrastructure of the internet and cloud computing, consume enormous amounts of electricity. In 2025 alone, data centers in Texas are expected to use more than 15% of the state’s total electricity consumption. Similarly, cryptocurrency mining, which uses complex algorithms to validate transactions on blockchain networks, is another industry that has seen explosive growth in Texas. These industries, while contributing to the state’s booming tech sector, are putting significant pressure on the state’s power grid, particularly during periods of extreme weather or high demand.
SB 6: A Balancing Act
Senate Bill 6 is designed to balance economic growth with the need to protect the state’s energy infrastructure. Authored by Senator Phil King, the bill requires large energy users to submit detailed energy consumption plans to ERCOT, outlining how they intend to manage their power demand during peak periods. This plan includes measures for reducing energy usage during high-demand times and ensuring that energy consumption does not disrupt grid reliability.
One of the key provisions of SB 6 is the imposition of interconnection fees on large users who seek to connect new energy-intensive facilities to the grid. These fees are intended to ensure that major consumers of electricity contribute to the grid’s infrastructure costs and do not place an undue burden on residential users. The legislation also includes provisions that require large energy users to install backup generators or renewable energy sources, such as solar panels, to help alleviate demand during critical periods.
In a move to increase transparency, SB 6 also mandates that major energy consumers disclose their electricity consumption patterns and backup power generation capacity to the public, providing Texans with more insight into the industries impacting the grid. This level of transparency is expected to foster more accountability among businesses and ensure that they contribute to the grid’s reliability.
Addressing “Phantom Loads” and Cryptocurrency Mining
Another significant aspect of SB 6 is the regulation of what are known as “phantom loads.” This term refers to the energy consumption of cryptocurrency miners, which are often not fully accounted for in grid planning. Unlike traditional industrial energy users, cryptocurrency miners use large amounts of electricity that do not always reflect directly in the local market due to the decentralized nature of their operations. By imposing stricter regulations on these operations, SB 6 aims to better account for their energy consumption and prevent sudden surges in demand.
The regulation of cryptocurrency miners has been one of the most contentious aspects of SB 6. Miners argue that the bill unfairly targets their operations, which have been a significant economic driver in parts of Texas. In response, SB 6 allows these miners to offset their energy consumption by investing in renewable energy sources or providing backup generation capacity, which will help mitigate their impact on the grid.
The Role of ERCOT and PUC
SB 6 also grants the Public Utility Commission of Texas (PUC) and ERCOT greater authority in managing the energy grid and overseeing large energy users. Under the new law, ERCOT will have the power to enforce penalties on companies that fail to comply with energy consumption guidelines or fail to implement energy-saving measures during high-demand periods.
ERCOT will also be required to establish new energy-saving programs and initiatives that encourage both large energy users and consumers to participate in grid reliability efforts. These programs will be designed to reduce energy consumption during peak periods and prevent grid failures, especially during extreme weather events. The bill also includes provisions for more investment in grid infrastructure, particularly in underserved and rural areas, to ensure that all Texans have access to reliable power.
Broader Implications for Texas’s Energy Future
SB 6 is just one of many efforts in Texas to ensure that its energy grid remains reliable, sustainable, and capable of meeting the demands of a growing economy. The state has long been a leader in the energy sector, particularly in oil, gas, and wind energy production. However, as renewable energy sources continue to play an increasingly important role in the state’s energy portfolio, legislation like SB 6 is crucial in managing the transition to a greener, more sustainable grid.
Additionally, SB 6 aligns with Texas’s broader commitment to reducing carbon emissions. By encouraging large energy consumers to invest in renewable energy and backup generation capacity, the bill helps the state work toward its environmental goals while maintaining its position as a top destination for business investment.
Conclusion
Texas’s push to regulate large energy consumers through SB 6 is a necessary step in balancing the state’s economic growth with the need to protect its energy infrastructure. By ensuring that major industries contribute to grid stability and operate with greater accountability, the state can continue to attract business investment while safeguarding the energy needs of its residents. SB 6 reflects the state’s commitment to a sustainable, business-friendly energy future and highlights the ongoing challenges and opportunities that come with managing one of the country’s most dynamic and diverse energy markets.
