Texas data center and energy laws

What Texas has enacted on data center and energy, what each law requires, and what the bills still moving would do. Texas is one of 29 states that enacted a data center and energy law in the 2025 and 2026 sessions.

Bills in scope
11bills in scope
Past committee
4past committee
Most recent action
20 June 2025most recent action

Data center and energy laws enacted in Texas

2 data center and energy laws enacted in the Texas Legislature in the 2025 and 2026 sessions, newest first. Each links to the legislature's own page.

  • HB 3824Relating to fire safety standards and emergency operations plans for the operation of battery energy storage facilities; providing administrative penalties.Took effect 1 September 2025

    What it requires: Battery operators and municipally owned utilities must ensure battery energy storage facilities of one megawatt hour or greater meet fire safety standards adopted by the commissioner based on UL 9540A and NFPA 855 standards. They must produce site-specific emergency operations plans, provide them to local first responders before commercial operations, and conduct fire safety inspections every five years.

  • SB 6Relating to the planning for, interconnection and operation of, and costs related to providing service for certain electrical loads and to the generation of electric power by a water supply or sewer service corporation.Enacted 20 June 2025

    What it requires: Large load customers in ERCOT requesting new or expanded interconnection exceeding 75 megawatts must disclose whether they are pursuing substantially similar requests elsewhere that would materially change their interconnection request. Interconnecting utilities must pass through reasonable interconnection costs to large load customers. Large load customers must disclose on-site backup generating facilities capable of serving at least 50 percent of on-site demand.

    Large-load tariffs and cost allocation, Grid reliability and load flexibility

Data center and energy in Texas, by topic

Data center and energy bills in Texas

The bills not yet law, furthest along first, with what each would do.

2Enacted

2Past committee

7Introduced or inactive

11 bills in scope

Past committee

2

HB 3970Relating to the interconnection and operation of large loads.Passed chamber

What it would do: Requires ERCOT to develop an expedited interconnection program for large loads exceeding 75 megawatts that agree to deploy behind-the-meter generation and reduce grid consumption when directed, with priority processing in the interconnection queue.

HB 4290Relating to a qualifying cogenerator that serves a large load and a colocated desalination facility.Passed chamber

What it would do: Amends the definition of qualifying cogenerator to include owners or operators of dispatchable generation that provide thermal output to a colocated desalination facility and serve a load whose primary purpose is manufacturing digital products, and clarifies such operators are not retail electric utilities.

Introduced or inactive

7

SB 2211Relating to a qualifying cogenerator that serves a large load and a colocated desalination facility.In committee

What it would do: Expands the definition of qualifying cogenerator to include owners or operators of dispatchable generation that provide thermal, steam, or waste heat to a colocated desalination facility while serving a load whose primary purpose is manufacturing digital products, and exempts such cogenerators from being considered retail electric utilities.

HB 5588Relating to an exemption from ad valorem taxation of the total appraised value of real property used as a data center and the tangible personal property used by the data center to meet the data center's demand for energy.In committee

What it would do: Exempts from ad valorem taxation the total appraised value of real property and tangible personal property used as a qualified data center that meets specific infrastructure requirements and provides energy or ancillary services to ERCOT or another power grid, effective January 1, 2026, if approved by voters.

SB 2888Relating to the temporary sales and use tax exemptions for certain tangible personal property related to data centers and large data center projects.In committee

What it would do: Amends Texas Tax Code to increase capital investment requirements for data center tax exemptions from $200 million to $500 million for large projects and adds transmission capacity requirement of at least 20 megawatts, effective for certifications on or after September 1, 2026.

HB 4908Relating to the establishment of the Texas prosperity payout fund; imposing taxes on the gross revenues of and consumption by certain industry participants; authorizing administrative penalties.In committee

What it would do: Establishes the Texas Prosperity Payout Fund and imposes taxes on cryptocurrency mining electricity consumption, artificial intelligence infrastructure, data centers, semiconductor manufacturers, cloud service providers, telecommunications companies, and large software companies, with all revenue deposited to fund monthly payments to eligible Texas residents.

SB 2315Relating to a cost overage exemption for interconnection of advanced nuclear reactors to the ERCOT transmission system.In committee

What it would do: Exempts advanced nuclear reactors from paying excess interconnection costs to the ERCOT transmission system, defining advanced nuclear reactors as fission-based reactors with generation capacity between 50 and 1400 megawatts.

SJR 72Proposing a constitutional amendment to authorize the legislature to exempt from ad valorem taxation the total appraised value of real property used as a data center and the tangible personal property used by the data center to meet the data center's demand for energy.In committee

What it would do: Proposes a constitutional amendment authorizing the legislature to exempt from ad valorem taxation the total appraised value of real property used as a data center and tangible personal property at the data center used to meet its energy demand. Submits the amendment to voters on November 4, 2025.

SB 2074Relating to a study of the four coincident peak program by the Public Utility Commission of Texas and the independent organization certified to manage the ERCOT power region.In committee

What it would do: Requires the Public Utility Commission of Texas and ERCOT's independent organization to jointly study the four coincident peak program, including its rate design, cost shifting, potential solutions, and comparative demand charge calculation methods, with a report due to the legislature by December 1, 2026.

Bill titles link to the Texas Legislature's own page.

What LawSignals covers

What counts as data center and energy legislation

In scope: Large-load tariffs and cost allocation; siting, zoning and permitting; tax incentives and clawbacks; on-site and co-located generation; water, cooling and emissions; and grid reliability and load flexibility.

Questions

Does Texas have a data center and energy law?

Yes. Texas enacted 2 data center and energy laws in the 2025 and 2026 sessions, among them HB 3824 and SB 6. Each is listed on this page with what it requires.

When do Texas's data center and energy laws take effect?

HB 3824 on 1 September 2025. The others have no single date in their text.

Which data center and energy bills are moving in Texas?

2 bills not yet law have passed a committee or a chamber, the furthest along HB 3970 (passed chamber) and HB 4290 (passed chamber).

What does Texas legislate on most in data center and energy?

Large-load tariffs and cost allocation (4 bills), Grid reliability and load flexibility (3 bills) and Tax incentives and clawbacks (3 bills).

Are these summaries reviewed by a lawyer?

No. Which bills count as Data center and energy bills, and the line on what each law requires or each bill would do, are drafted by software from the bill's own text and not reviewed by an attorney. Every bill links to the legislature's own record: read the text before relying on it. The list covers bills from the 2025 and 2026 sessions.

Other practice areas in Texas

Data center and energy legislation in other jurisdictions

49 more currently hold bills in this tracker

Know when Texas's data center and energy law changes

An alert when a bill moves, and one report a month on what changed in every state and Congress.

Track data center and energy laws freeAbout the Data Centers and Energy Load Tracker