ERCOT's large-load interconnection queue closed May at roughly 238,000 megawatts, north of 70 percent of it data centers. On Wednesday, a developer in Hill County took $80 million of land, 1,235 megawatts of planned load, and a one-year county moratorium and filed all three of them in U.S. District Court in Waco. The complaint calls the county's freeze "illegal under Texas law." It is asking a federal judge to say so.

This is the gap the rest of the year is going to be about. ERCOT has a paper queue an order of magnitude larger than the grid can serve. Counties are starting to use their zoning authority to slow it down. The grid operator is about to chop the queue with a one-shot Batch Zero filing window. Turbine OEMs are sold out past 2029. And the developers that are actually going to energize something in 2026 are the ones writing $96 million preferred-equity checks and buying combined-cycle sets off the shelf.

Five stories from the past seven days, all pointing at the same thing: the difference between what's announced and what's built keeps getting wider, and the people closing that gap are doing it one ITC transfer and one Siemens SGT800 at a time.

"Illegal Under Texas Law": RCM Hill Drops a $100 Million Federal Complaint on Hill County

RCM Hill, LLC filed suit Wednesday in the Western District of Texas, Waco Division, against Hill County and its five commissioners over the county's May 12 data-center moratorium. The developer says it has spent more than $80 million assembling 800-plus acres across four landowner contracts at roughly $100,000 an acre, plus another $1 million in due diligence, to site a 1,235 MW campus it calls Project Aquila. The complaint asks for damages "in excess of $100 million" and a preliminary injunction against the moratorium.

The legal theory is the interesting part. RCM Hill is arguing the freeze is a regulatory taking under the Fifth and Fourteenth Amendments, that the county exceeded its statutory authority under the Texas Local Government Code, and that the moratorium's stated public-purpose findings are pretextual. Senator Paul Bettencourt has already sent a letter to Attorney General Ken Paxton asking him to weigh in on whether the county had the authority to do this at all. Paxton has not responded publicly.

I covered the Hill County pushback five weeks ago as a community-pressure story. That framing is now obsolete. Once a developer puts $80 million of dirt and a 1,235 MW load number into a federal complaint, you are not in NIMBY-meeting territory anymore. You are in precedent territory. Every developer with a county-jurisdiction site in Texas is going to read this docket. So is every county commissioner who was thinking about copying the Hill template.

The relevant question for the rest of us is what happens to the Provident Data Centers site in Hillsboro, the 300-acre project whose announcement triggered the moratorium in the first place. The City of Hillsboro is still working on a 1,000-foot residential buffer rule. Hill County is now defending its moratorium with public funds. The Aquila land is still under contract. Watch the docket.

Batch Zero: 64 Days to ERCOT's Queue Reset

While Hill County argues about whether 1,235 MW can be built at all, ERCOT is about to start telling 238,000 MW of queue submissions which of them get a study slot. The mechanism is PGRR145 and NPRR1325, the Large Load Interconnection Study rule that came out of SB 6. The dates are now load-bearing.

The ERCOT Board of Directors is scheduled to take a final vote on June 1. If it passes, the protocol goes effective August 1. Between those dates, the calendar runs on rails: July 10 is the last day for Large Load Interconnection Study approvals under the legacy process, July 24 is the Batch Zero submission cutoff, and August 7 is when ERCOT classifies each Batch Zero project as either fast-tracked, deferred, or sent back to the line. Developers who do not file by July 24 will not get a 2026 slot.

The May 21 Large Load Working Group meeting was the dress rehearsal. ERCOT's own April Board update says only 9,062 MW of large load has actually been approved to energize in the past twelve months, against the 238 GW queue and a non-simultaneous peak large-load consumption observation of roughly 3,900 MW. So roughly 4 percent of the queue gets a green light, 2 percent shows up on the meter, and the rest is paperwork that Batch Zero is about to triage.

This is the policy lever everyone in the industry has been asking for since SB 6 passed. It is also a real-money event for developers who have been free-rolling submissions to hold position. After July 24, the option premium on a speculative queue spot goes to zero.

$450 Million for Red Egret. 600 MWh on the Ship Channel.

Spearmint Energy closed roughly $450 million in financing this week on Red Egret, a 300 MW / 600 MWh standalone battery project in Texas City targeted for 2027 commercial operation. The capital stack tells you exactly what BESS finance looks like in 2026: a $225 million construction facility led jointly by First Citizens Bank and Investec, a $96 million preferred-equity investment from Nuveen's energy infrastructure credit platform, and roughly $126 million expected via Inflation Reduction Act ITC transfer.

I talked about Spearmint two weeks ago when its 400 MWh Del Rio and Laredo project hit commercial operation. Red Egret is a different geography and a much larger system. Texas City is in the Coast load zone, on the Houston ship channel, next to a petrochemical corridor that runs negative power-price hours regularly and gets caught short on hot August afternoons. That is a different congestion profile than the West Texas batteries paired with solar that dominate the early-2025 vintage, and it is the direction the next phase of ERCOT storage build is going.

The structure is the story. Merchant BESS revenues have compressed sharply from the 2023 numbers, and vanilla project finance has gotten tighter. The way you close a 600 MWh project now is to layer preferred equity on top of a construction loan and monetize the ITC up front. That is the template every Texas storage developer is going to be running for the next eighteen months.

Gas Crowds Out Wind in the Queue, and the Turbines Are Sold Out Through 2029

Two adjacent data points reframed Texas generation this week. First, natural gas in the ERCOT interconnection queue has climbed from 12,500 MW in March 2023 to roughly 64,000 MW, a fivefold increase, and now exceeds wind in queue megawatts for the first time in six years. Roughly 40 GW of that is directly tied to specific data-center load. The TCEQ is sitting on Pacifico Energy's GW Ranch air permit in Pecos County, a 7.65 GW behind-the-meter gas plant that would be the largest single such permit in the United States, with annualized CO2 equivalent at up to 33 million tons.

Second, GE Vernova reported $2.4 billion in data-center-tied electrification orders in Q1 2026, more than the entire 2025 calendar year. Combined gas-turbine backlog plus slot reservations is on pace for 110 GW by year-end 2026. Siemens Energy and Mitsubishi Heavy Industries are similarly oversold. There are not enough turbine slots through 2029 to build the 64 GW Texas gas queue and the rest of the global gas backlog at the same time.

One of these numbers has to give. The way it gives is going to be schedule slippage on the back end of the data-center buildout, which is going to push more 2026 power demand into the Batch Zero triage from the previous section. The OEM queue is the actual bottleneck. The interconnection queue is just where the OEM queue gets repriced.

Fermi America Buys 600 MW of Siemens SGT800s Off the Shelf

If you cannot wait in line for the turbines, you buy a set that someone else already ordered. Fermi America announced this week it has acquired more than 600 MW of combined-cycle gas-turbine equipment for Project Matador, the 5,769-acre HyperGrid campus outside Amarillo. The package is six Siemens SGT800 gas turbines, six heat-recovery steam generators, and one SST600 steam turbine — a fully aggregated combined-cycle set, named by model number.

Fermi already has preliminary state approval for the first 6 GW of gas at Matador. The May acquisition pulls forward the 1 GW of behind-the-meter power Fermi wants on-site by the end of 2026 to feed the first three 500,000-square-foot data center buildings. There is also a Siemens Energy LOI for an additional 1.1 GW behind it, and an NRC pre-application review running in parallel for up to four 1 GW reactors, with nuclear construction targeted for 2027.

The interesting part is not the size of the campus. The interesting part is the asset arbitrage. With turbine OEM lead times running to 2029 and beyond, secondary-market acquisition of in-hand equipment is now a strategic capability, not a procurement footnote. Expect to see more of it. Expect to see it priced at a premium over OEM list. And expect the developers that can write a check at that premium to be the ones with anchor-tenant offtake — which is to say, not many of them.

What to Watch Next Week

ERCOT Board of Directors, June 1. Final vote on PGRR145 and NPRR1325. If approved, the August 1 protocol effective date and the July 24 Batch Zero submission cutoff become binding. This is the single most important June 1 agenda item in the queue's history.

RCM Hill v. Hill County, U.S. District Court Western District of Texas. Watch for an emergency TRO or preliminary-injunction motion — the complaint asks for one — and for any response from AG Paxton to Senator Bettencourt's letter. The first written decision out of this docket sets the precedent.

ERCOT Final Summer SARA, June 1. The final Seasonal Assessment of Resource Adequacy for summer 2026 confirms or revises the 90.5–98 GW peak band ERCOT staff floated in April. With the queue closing on Batch Zero, the SARA number is what the legislature will use to justify or block whatever comes next.

PUCT large-load rulemaking under 16 TAC §25.194. Final adoption is tracked for July, but staff memos start dropping in early June. Anything that further constrains behind-the-meter co-location will land here first.

TCEQ air-permit dockets. Pacifico's GW Ranch permit is still open. Any next-tier behind-the-meter gas applications filed against the June 5 window are worth tracking — the 7.65 GW threshold is now the ceiling everyone is measuring themselves against.

Disclaimer: The Grid Report is Barrio Energy's market intelligence product. Nothing here is investment advice, and Andi is not your broker. Links go to primary sources wherever possible; form your own view.