Co-located net metering isn't firm before PUCT approval

PURA § 39.169 sets the approval path for co-located net metering in ERCOT. When a power generation company and a new large load customer wish to enter into a net metering arrangement, the Docket 59115 Order summarizes the statute this way: "the applicants must obtain prior approval of the agreement from the Commission." ERCOT has 120 days to study the arrangement after it receives the information it needs, and the Commission then has 60 days to approve or deny it. Before you treat a co-located arrangement as firm load, underwrite that clock and the hold-harmless risk for stranded or underutilized transmission assets.

Dockets 59115, 59399, and 59943 put PURA § 39.169 net-metering approvals on the October 15, 2026 open-meeting track. The Commission's net metering rule, 16 TAC §25.205, took effect April 15, 2026. The Commission decided Docket 59115 under PURA § 39.169, and its Order says the rule does not apply to that application, which was filed on December 12, 2025. ERCOT's study-commencement notices in Dockets 59399 and 59943 cite 16 TAC §25.205.

Docket 59115: Final Order under PURA § 39.169

Docket 59115 is the joint application of West Texas Solar Project II LLC and Silver Basin Digital Infrastructure LLC. West Texas Solar owns Taygete II, a 204 MW alternating-current solar facility in Pecos County. Silver Basin proposes a 180 MW data-center load co-located behind the Taygete II point of interconnection, netted for settlement behind a single EPS meter. AEP Texas is the interconnecting TSP. TNMP is the DSP with authority to provide retail electric delivery service to the netted load.

ERCOT filed its study results on August 20, 2026 (Item 28), with a confidential version on August 21 (Item 29), within PURA's 120-day window after it commenced study on June 5, 2026. The study concluded three points. The reviewed transmission security analysis identified no criteria violations under the topologies and contingencies evaluated. Resource-adequacy impacts to planning reserve margins ranged from negative 0.11 to negative 0.31 percentage points across forecasted seasons from Fall 2027 to Winter 2030/2031. ERCOT identified no stranded or underutilized transmission assets.

Docket 59115 is decided. The Commission's final Order (PUCT Docket 59115 Item 118 Order approving net metering arrangement (PDF), October 15, 2026) "approves the net metering arrangement, subject to the conditions imposed by this Order." Ordering Paragraph 1 imposes six conditions. Condition 1 adds that "When practicable, ERCOT must provide at least 60 minutes of notice in advance" of a curtailment instruction. The Order says the six conditions are consistent with those approved in "the three other net metering cases that have proceeded to a final decision" (Dockets 58881, 58872, and 59220). Conclusion of Law 1 states the legal basis: "The Commission has authority over this matter under PURA § 39.169." The Order notes that the application "was filed before the adoption of the Commission's net metering rule at 16 Texas Administrative Code (TAC) § 25.205," which took effect April 15, 2026. It concludes: "Therefore, any substantive requirements of that rule are inapplicable to this matter." Answering TNMP's metering argument, it repeats that "the net metering rule is not applicable here." Ordering Paragraph 4 directs all compliance filings and other notices to Docket No. 60373. No rehearing motion had been filed as of Oct 24, 2026.

The Docket 59115 schedule ran on these dates:

• ALJ memo: October 7, 2026
• Proposed Order filed: October 8, 2026
• Corrections or exceptions due: October 12, 2026
• Open meeting and Commission Order (Item 118) issued: October 15, 2026
• Commission decision deadline (Finding of Fact 37): October 19, 2026

The Commission issued its Order on October 15, 2026, ahead of the October 19 deadline.

ERCOT identified no stranded or underutilized assets. Conclusion of Law 15 reads: "Because no underutilized or stranded assets were identified, there is no need to conduct a hold harmless proceeding as a result of the proposed net metering arrangement under PURA § 39.169(d)(3)." That finding is case-specific. The next application can land differently once ERCOT finishes its stranded-asset analysis.

TNMP, the DSP, opposed approval and argued its tariff required it to own facilities at the point of delivery. The Commission concluded that approval "does not require TNMP to own facilities at the point of delivery if it serves as the DSP for the Silver Basin Load." It found TNMP's proposed condition requiring TNMP-operated facilities "not necessary to prevent a violation of other law" and not "a reasonable condition necessary to maintain system reliability." The Commission rested that holding on ERCOT's existing private use network framework, which "allows for a generation resource and a co-located load to exist behind common ERCOT-polled settlement metering" (Texas campus private-use networks and ERCOT-polled settlement metering).

What §25.205 requires (effective April 15, 2026)

The rule implements PURA § 39.169 and took effect April 15, 2026. The Docket 59115 Order applied the rule only prospectively and found its substantive requirements inapplicable to an application filed before the rule was adopted. Under the rule, a power generation company, municipally owned utility, or electric cooperative must not implement a net-metering arrangement with a large-load customer and an existing generation resource unless the Commission approves it first. Large load means total expected non-coincident peak demand of 75 MW or more at a single site. Existing generation resource means a generation resource or energy storage resource that ERCOT modeled as stand-alone as of September 1, 2025.

Applicants file a new docket with direct testimony, a completed large-load interconnection study (or another completed study process ERCOT protocols require), the interconnecting TSP, the interconnecting DSP if different, and the ERCOT notice. Parties are limited to the applicants, Commission Staff, ERCOT, the interconnecting TSP, and the interconnecting DSP if different. They need not file a motion to intervene.

ERCOT then studies system impacts, including transmission security, resource adequacy, and stranded or underutilized transmission assets. Not later than 120 days after the filing that marks commencement of study, ERCOT must file study results and recommendations. Not later than 60 days after that ERCOT filing, the Commission must approve, with or without conditions, or deny the arrangement.

The Commission may impose conditions. Those can include requiring behind-the-meter retail customers to reduce load during certain events. They can also require the existing generation resource to make capacity available during certain events, and can initiate a separate hold-harmless proceeding when the arrangement produces stranded or underutilized transmission assets. The rule also requires dispatchable-capacity make-whole conditions when the resource made dispatchable capacity available before the arrangement.

The §25.205 hold-harmless and stranded-cost path

A stranded transmission asset is one that, as a result of the net-metering arrangement, is no longer providing service to the public or may otherwise be retired without impairing adequate transmission service. An underutilized transmission asset is one expected to transmit, on an average annual basis, at least 25% less power commensurate with its maximum capacity and that is not providing significant reliability benefits to the ERCOT system.

Subsection (l) of the rule sets the steps. If the Commission requires a hold-harmless proceeding, each TSP associated with those assets must, within 60 days of that order, file an application to quantify the costs and to reflect removal of those costs from the TSP's rates. Once removed, the costs must be collected by the TSP from the existing generation resource owner and the interconnecting large load customer in a proportion the Commission sets or the parties agree. Those costs stay out of the TSP's rates in future proceedings unless the Commission later finds, in a comprehensive base rate proceeding, that the assets are no longer stranded or underutilized and that the TSP has not otherwise been compensated.

That is the cost risk for the campus and the generator. It is separate from the §25.194 reassignment of stranded transmission capacity (Texas data center stranded transmission capacity recovery under §25.194).

The October 15 multi-docket track

Three PURA § 39.169 net-metering dockets sat on the October 15, 2026 agenda. ERCOT cited 16 TAC §25.205 when it commenced study in Dockets 59399 and 59943. The Docket 59115 Order, decided under PURA § 39.169, states that the net metering rule is not applicable to that case.

Docket 59399 Order No. 9 (October 7, 2026) locks the second-phase schedule around an anticipated October 13 study filing and a December 12 decision deadline. ERCOT filed its study results and recommendations on October 13, 2026 (Item 53). Docket 59943 Item 13 is ERCOT's October 6 notice that study has commenced and that results are due not later than February 3, 2027.

Owner takeaway: one docket (59115) is decided, and two PURA § 39.169 net-metering clocks remain (59399, 59943). Underwrite the approval path and the hold-harmless contingency before any model treats co-located net metering as firm.

Before the next commitment

How to structure any application, what conditions to accept, and how to allocate hold-harmless exposure between generator and load are the sponsor's calls, made with counsel. The steps below gather the facts for them. None of this is legal advice.

1. Note when the application was filed. The Docket 59115 Order found the rule's substantive requirements inapplicable to an application filed December 12, 2025, before the rule was adopted. For a filing near the rule's March 26, 2026 adoption or its April 15, 2026 effective date, decide with counsel which requirements apply.
2. Confirm whether the paired resource was modeled in ERCOT's Network Operations Model as stand-alone as of September 1, 2025. Separately confirm whether either §25.205(a) exclusion applies: co-located large load at energization, or majority ownership by the load's parent as of January 1, 2025.
3. Measure the campus against the large-load trigger: total expected non-coincident peak at a single site equal to or greater than 75 MW, and not already modeled in a generation or energy-storage PUN as of September 1, 2025.
4. Calendar the two statutory clocks from the ERCOT commencement filing: 120 days to study results, then 60 days to a Commission order.
5. List every transmission asset the interconnecting TSP may flag as stranded or underutilized, and gather the cost components a hold-harmless application would quantify (including depreciation, tax, return, and operations and maintenance).
6. Decide with counsel how generator and load would split any hold-harmless collection if the Commission orders one.
7. For any pending docket (59399, 59943, or later), pull the latest ERCOT study recommendation, Proposed or Final Order, and open-meeting agenda item before treating the arrangement as approved.

If your co-located load depends on a net metering setup the PUCT has not approved yet, our Power & energization work tests the supply route and builds a fallback before you commit to it.