The Department of Energy closed a loan of up to $3.26 billion to AEP Texas on July 8. Buried in the announcement is a number that deserves more attention than the loan itself: AEP Texas says it has signed letters of agreement supporting up to 41 GW of potential new load additions through 2030.
That is one utility, in south and west Texas, with signed paper. Set it against the statewide interconnection queue — currently reported at 438 GW — and you have the beginning of an honest credibility filter. The queue is what everyone asked for. The letters of agreement are what somebody actually put a signature on. The ratio between those two numbers is the most useful thing anyone has published this year.
"Texas Is Poised for Incredible Growth Over the Next Five Years"
The financing comes through DOE's Office of Energy Dominance Financing and funds roughly 100 transmission projects across about 2,800 miles of rebuild, reconductor and new line. DOE's claim is that the upgraded infrastructure will carry double the power it does today, and that customers will see about $685 million in savings over 30 years across more than a million AEP Texas ratepayers.
Take the savings figure with the usual caution applied to any 30-year number in a press release. The 2,800 miles is the part that matters. Reconductoring existing corridors is the only way to add meaningful transfer capability in Texas on a timeline shorter than a decade, because it mostly avoids new right-of-way and the condemnation fights that come with it. This is the unglamorous version of grid expansion and it is the only version that arrives before 2030.
This is the third utility financing completed under the program, and AEP's parent took a separate $1.6 billion deal last year. Energy Secretary Chris Wright framed it around AI, advanced manufacturing and the Permian. Note what that list has in common: none of it is residential, and all of it is load that shows up in large blocks with its own lawyers.
"One More Than They Can Effectively Regulate"
Floodlight and the Texas Tribune published the best-reported piece of the month on July 9, and it explains the mechanism underneath every "we're building our own power" announcement of the past year.
Since 2024, at least 38 Texas data centers have obtained minor permits — permits by rule and standard permits — for on-site generation, quietly authorizing more than 2,100 backup diesel generators statewide with no public notice and no environmental review. Those generators are collectively permitted for nearly 2,500 tons of nitrogen oxides a year, which is more than triple what the state's newest coal plant emits.
The threshold-gaming is the part that should end the debate about whether this is accidental. A Cyrus One site in Whitney is permitted at 249.1 tons per year of NOx against a review trigger of 250. A Vantage site outside San Antonio comes in at 99.8 tons against a 100-ton threshold. Vantage started with minor permits for 22 diesel generators and is now seeking more than 80. These are not coincidences; they are engineering to a number.
The OpenAI and Crusoe "Stargate" campus in Abilene is the clearest case. Eleven hundred acres, a 360 MW on-site gas plant, ten turbines and 62 diesel generators already in place, with applications pending for 41 more turbines and 18 more generators. Its current minor permits already allow 1.6 million tons of greenhouse gas annually. Bruce Buckheit, who ran air enforcement at EPA, put it about as dryly as it can be put: "When you get to 62, you start thinking, well, wait a minute, maybe the scale is wrong here."
TCEQ is not positioned to catch up. The agency is carrying more than 1,400 open enforcement cases and resolved 39 last year. Kathryn Guerra, formerly of TCEQ and now at Public Citizen, did the division: "At that rate, it's going to take them 35 years." James Doty, who spent three decades at the agency, offered the sharper structural point — by the time a data center is applying for its operating permit, the siting decision is already made and unwindable.
The line in the headline is Doty's colleague's, and it is the thesis: every permit the agency issues is one more than it can effectively regulate. Texas did not decide to let data centers build their own power plants outside public review. It decided, years ago, on a permitting threshold, and the industry found it.
Disclosure worth carrying: Floodlight notes that Meta and Public Citizen have both been financial supporters of the Texas Tribune.
438 Gigawatts In. About 100 Expected Out.
July 10 was the first hard deadline in the Batch Zero process the PUCT approved in June. Customers had to get their completed election forms to their interconnecting utility by end of day. The utility-side package goes to ERCOT by July 24, deficiencies must be cured by August 31, and ERCOT notifies applicants of classification in August.
The queue figure now in circulation is 438 GW, up from the 410 GW I cited a month ago, with something close to 90 percent of it data center load. That is more than five times the all-time ERCOT peak. ERCOT's own expectation is that roughly 100 GW will meet the Batch Zero criteria — about 23 percent of what is nominally in line.
A caution on that 438: it traces to mid-June and was not refreshed this week, and the queue number has been defined differently at different points this year — 233 GW in December, 238.6 GW in March, 410 GW in June. Some of that growth is real and some of it is definitional. The trajectory is the signal; any single print is not.
The financial security default is $50,000 per MW where specific upgrade costs cannot be determined, applied to loads at or above 75 MW. That is the number that will do the actual filtering, and it is still a proposed rule under Project 58481, not an adopted one.
Context worth holding onto: FERC issued Section 206 show cause orders to all six of its jurisdictional RTOs on June 18, directing them to justify or reform their large-load interconnection rules. ERCOT is exempt, being outside FERC jurisdiction. So the one grid operator that moved first on this problem is the one Washington cannot order to move at all, and its rules are now the benchmark the other six will be measured against. Texas is the control group.
11,674 MW
Batteries set a new hourly dispatch record on July 8 at 11,674 MW, beating the 10,372 MW mark from March 13. Solar set a new weekly average record at 13.84 GW. Coal ran at 9.01 GW and gas at 28.94 GW.
Load ran 14.3 percent above the same week last year, which sounds alarming until you adjust for temperature, at which point it is 6.0 percent, with the eight-week adjusted average at 4.9. Weekly average load came in at 69.71 GW against the 69.91 GW record from August 2024 — near-record for the second consecutive week without touching it.
Two records in one week, both on the supply side, both absorbed without a conservation appeal. The story of the summer so far is not that the grid is straining. It is that storage and solar are quietly doing the work people spent a decade insisting they could not do, while the argument in Austin is about who pays for the wires.
What to Watch Next Week
July 24 is the utility-side Batch Zero deadline. DSPs and TSPs forward eligibility packages to ERCOT. This is the first point at which a real submitted-megawatt total becomes knowable, and the first honest read on how much of the 438 GW was ever more than a spreadsheet entry.
July 31 is the PUCT's deadline to initiate action on reducing residential transmission costs, under Abbott's June directive. Watch dockets 58484 and 58000.
The joint PUCT and ERCOT memorandum to the Governor is due July 17. It is supposed to identify statutory limits and recommend legislation, which makes it the opening bid for the 2027 session.
August 7 brings Batch Zero classification notices — base load, studied load, or excluded. That is when 438 GW starts getting sorted toward 100.
August 17 is when the six FERC-jurisdictional RTOs must respond to the show cause orders. Every response will be read against what Texas already did.
Disclaimer: The Grid Report is Barrio Energy's market intelligence product. Nothing here is investment advice. Links go to primary sources wherever possible; form your own view.
