For six months the story in Texas transmission has been ERCOT and the transmission and distribution utilities racing to keep up with an interconnection queue growing faster than anyone can classify it. This week the story flipped. Lawmakers who wrote a narrow regional-reliability bill in 2023 are now telling the Public Utility Commission they never authorized what got built on top of it, a state senator is calling for wholesale denial of pending applications, and a sitting PUCT chairman has admitted, on the record, that the Legislature never took an explicit vote. Meanwhile capital kept moving regardless: an $860 million gas plant changed hands, a gas-plus-nuclear hybrid near Victoria cleared its next gate, and a Bitcoin miner's Texas pivot ran straight into the audit process the governor ordered three weeks ago.
Call it the week Austin stopped watching the grid and started refereeing it.
"A Slap in the Face to the Legislative Branch"
PUCT commissioners were scheduled to vote today, August 21, on two segments of the 765-kV Strategic Transmission Expansion Plan's Permian buildout: Dinosaur–Longshore, filed under Docket 59315 on February 19 with a statutory 180-day deadline that expired August 18, and Longshore Switch–Drill Hole Switch, filed separately under Docket 59029 and abated back in June pending the outcome of the Dinosaur–Longshore case. Together the two segments are one piece of a project Oncor and ERCOT have described as three lines, five segments, and more than 1,200 miles, with lifetime ratepayer costs approaching $100 billion.
Administrative law judges recommended approval on July 24 — but not of Oncor's preferred route. They picked a hybrid alignment, Route 559, instead. Worse for Oncor: the same judges found the company failed to notify roughly 1,650 landowners within 520 feet of route segments that were added or modified after the initial public meetings. Oncor's fix — more than 4,200 written notices sent after the fact — didn't cure the defect, according to the ruling.
That's the backdrop for a legislative revolt that's been building since a 15-hour Senate Business and Commerce Committee hearing on July 29. Lt. Gov. Dan Patrick backed Sen. Charles Schwertner's call for PUCT to deny every pending 765-kV application until landowner concerns are addressed. State Reps. Brad Buckley and Shelby Slawson argue PUCT, ERCOT, and Oncor stretched a narrow 2023 regional-reliability bill, HB 5066, into what amounts to an unauthorized statewide transmission plan. Buckley didn't hedge: "The contention that House Bill 5066 authorized what is being proposed is a slap in the face to the legislative branch and a rogue interpretation by entities that seek profit and guaranteed returns on investment over honest interpretation of state law." PUCT Chairman Thomas Gleeson has more or less conceded the point — telling a Senate committee in July that lawmakers never explicitly voted to approve the buildout, even as the commission keeps processing dockets one by one.
Two days before the vote, the Texas House State Affairs Committee ran its own six-hour-plus hearing on data center costs. The Office of Public Utility Counsel's Benjamin Barkley used the platform to push a cost-allocation fix PUCT is separately already moving toward: shifting large-load billing from the current 4-coincident-peak model to a 12-coincident-peak model, which would stop big loads from dodging transmission costs by curtailing only during the handful of hours ERCOT currently measures. A Hill Country landowner named Beth Kunz put the other side plainly: "I retired to the Hill Country because of the land, because of the natural resources, because of the beauty and the dark skies, and all of that is currently threatened for a project that's just an extension port across the state."
LS Power Pays $860 Million for 606 Megawatts Constellation Had to Sell
LS Power Equity Advisors agreed on August 6 to buy the 606-megawatt Brazos Valley Energy Center, a gas-fired combined-cycle plant outside Houston, from Constellation Energy for roughly $860 million. The sale isn't optional for Constellation — it's the final piece of a divestiture package required to clear its acquisition of Calpine, and it closes the file on that regulatory obligation. LS Power expects the deal to close in the fourth quarter, pushing its national operating fleet to about 14,100 MW.
The math on why dispatchable Texas gas keeps changing hands: dealmakers have gone after ERCOT capacity roughly 58 times this year, more than California and New York combined. Nobody's buying gas plants in Texas because they expect the fuel mix to shift toward gas. They're buying them because gas is the only thing on the grid today that can plausibly be under contract to a data center by 2027.
Blue Energy and GE Vernova Move Their Nuclear-Gas Hybrid to the Next Gate
Blue Energy and GE Vernova Hitachi Nuclear Energy signed an agreement on August 13 to push their planned 2.5-gigawatt hybrid plant near Victoria into engineering, licensing, and safety-analysis work. The design pairs GE Vernova's 7HA.02 gas turbines with GE Hitachi's BWRX-300 small modular reactors, built in two phases: Phase 1, targeted for 2030, puts roughly 1 GW of gas turbine capacity onto a nearby data center; Phase 2, targeted for 2032, adds up to five BWRX-300 units and another 1.5 GW of nuclear capacity on the same site. A final investment decision is targeted for 2027.
It's a hedge, not a bet on either technology. Gas gets the site energized on a timeline a hyperscaler can actually plan around. Nuclear, five years later, gets it off the fuel-cost treadmill entirely — assuming the SMRs ship on schedule, which is its own running story in this newsletter.
Cipher's Cotulla Bet Runs Into the Audit It Was Supposed to Survive
Cipher Digital — renamed from Cipher Mining after a February board vote, formalized publicly on its May earnings call — reported second-quarter results on August 4 that made the rebrand look premature. Revenue came in at $24.8 million, down from $34.8 million in the first quarter; the loss per share was $0.65 against a consensus estimate of $0.23. The stock dropped 15.6% that day.
The timing wasn't a coincidence. Governor Abbott's directive ordering ERCOT to audit large-load interconnections landed August 3 — one day before Cipher's earnings call. Management told analysts the Batch Zero classification answer they'd expected in early August "would not arrive," and that new timing was too hard to predict. ERCOT has since filed three good-cause exception requests with PUCT seeking relief from its own Batch Zero deadlines, and PUCT considered them at its August 20 open meeting. State officials have told PUCT the audit itself will cover 250 to 300 projects representing roughly 200 GW of future demand — more than twice ERCOT's own peak demand record.
Cipher's smaller Reveille site in Cotulla — 70 MW scalable to 200 MW, bought for $2.5 million in 2024, energization targeted for 2027 — is now caught in the same slowdown, and it's running into local friction on top of it. Cotulla's city attorney warned councilors this week that no one in city government has adequate experience negotiating with Cipher, and recommended the city hire outside help before signing anything. That's a small-town preview of exactly what the statewide audit is designed to catch: deals moving faster than the institutions reviewing them.
What to Watch Next Week
The PUCT vote itself. Commissioners hadn't ruled on Dinosaur–Longshore or Longshore–Drill Hole as of this writing. Watch for whether they follow the administrative law judges' Route 559 recommendation or side with Oncor's original alignment — and whether the landowner-notice defect delays a decision on Longshore–Drill Hole specifically.
ERCOT's good-cause exception requests. PUCT's ruling on the Batch Zero deadline relief ERCOT asked for determines how much runway the audit actually gets before large loads start missing contractual milestones.
Cipher's next interconnection update. If Reveille's classification slips into the fourth quarter, that's the clearest signal yet of how much the audit is actually slowing individual projects versus just adding paperwork.
LS Power's regulatory clock on Brazos Valley. A fourth-quarter close assumes no antitrust friction. Watch for the next Hart-Scott-Rodino filing update.
The next STEP Permian segment. Bell County East–Big Hill is still working through the SOAH process behind Dinosaur–Longshore. If today's vote goes badly for Oncor, expect the company to adjust its approach before that one reaches a hearing.
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.
