You cannot sell the capacity. You can sell the project that holds it.

Current as of September 14, 2026. The Section 25.194 rule discussed here is an adopted staff-recommendation order; subsection lettering shifted between the proposed and adopted versions, so confirm exact citations before relying on them. Revision log at the foot of this article.

Part of a five-article series on phased Texas data center campus development and the commitments sized to a buildout that may not arrive.

• Part one. The exposure: why a compliant tenant is the expensive one
• Part two. Where the exposure bites: security, tariffs, hedges and covenants
• Part three. Sizing the shared works against an uncertain phase 2
• Part four. Public commitments sized to full buildout
• Part five. Recovery once the phase has already stalled

The short version, for the capital committee.

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Everything in the companion articles is preventive. This one assumes it already happened: your anchor tenant performed on phase 1, declined phase 2, and you are holding shared works and an interconnection position sized for a campus that is not arriving. The exposure is priced in You underwrote the tenant's credit and the tenant's power. This article is about what you can actually do next.

The first instinct is to sell the interconnection position. That instinct runs into a wall worth understanding before you spend legal fees on it.

The finding is a sharp asymmetry. The regulatory route, getting the grid to move your capacity somewhere useful, is closed. The commercial route, selling the land and entity that hold the position, is open and currently well priced.

Reassignment is prohibited, and the rule says so

The adopted Section 25.194 prohibits an interconnecting distribution service provider from reallocating transmission capacity and prohibits an interconnecting transmission service provider from doing the same. Only ERCOT reallocates, and only in a future interconnection study.

Capacity from a cancelled or withdrawn request, or from a customer that misses a phased energization milestone by twenty-four months, returns to ERCOT for a later cohort. It cannot be recycled inside the same study, because doing so would require restudying every load in it.

You get no right to nominate a successor, no ability to direct where the capacity goes, and no share of its value. The Commission rejected a request to let customers retain unused capacity in terms that describe this situation directly: allowing a large load customer to retain unused transmission capacity in perpetuity in all circumstances "would represent an inefficient use of vital electric energy infrastructure." Several parties asked for a successor or reassignment pathway during the rulemaking. All were denied. The statute contemplates a successor in interest, but the rule declines to implement one.

What comes back is money, not optionality, and only part of it. The adopted order returns 80 percent of the financial security associated with allocated transmission capacity in the general case, subtracting 20 percent. The retention is tiered: for batch zero loads that do not meet the maturity criteria in ERCOT Planning Guide Section 9.2.1.2(1), the subtraction is 50 percent. Establish which tier applies before you model the recovery, because on a $15 million posting the difference is $4.5 million. Cash contribution in aid of construction does not come back at all.

What does transfer is the request, at the entity level

This is the part most commentary misses, and it is the whole basis of a recovery.

ERCOT's Batch Zero readiness guidance addresses it directly: a transfer of the large load interconnection request to a new entity "will not impact the inclusion and classification of the Large Load in Batch Zero," provided the new interconnecting entity meets the applicable eligibility criteria and the transmission service provider sends ERCOT an updated load interconnection form. Changes to load design, end use activity or point of interconnection are reviewed case by case and may affect qualification.

So the position moves when the project moves. It does not move on its own, and it does not survive being pointed at different land. Site control, the end-use customer nexus and the sworn entity-specific attestations all bind it to a parcel and a user. A buyer acquiring only the position holds none of those and cannot re-attest.

The practical consequence is that recovery is structured as an equity sale of the project company or a land sale with agreements assigned. The first is cleaner, because the interconnecting entity remains the same legal person and no re-attestation is triggered. This is why data center site transactions are structured as entity acquisitions rather than asset sales.

The market for that bundle is real, and there is a benchmark

In July 2026 Plug Power agreed to sell its Graham, Texas project, comprising land and associated 164 MW of grid interconnection assets, to Stream Data Centers for up to $76.5 million: $50 million at closing and up to $26.5 million contingent on the load capacity confirmed in the final interconnection agreement, plus release of roughly $14 million of cash collateral on transfer of the interconnection obligations.

The earnout is the detail worth studying. It is indexed to confirmed megawatts, which is the market pricing the interconnection directly rather than the real estate. That implies roughly $467,000 per MW, against nearby rural land at a small fraction of the total. The dirt was a rounding error.

Re-leasing is the other live path, and conditions favor it. CBRE put North American data center vacancy at 1.4 percent in the first half of 2026 with 80 percent of under-construction capacity preleased, and Dallas Fort Worth at 2.8 percent with 95 percent of more than 765 MW under construction preleased. The closest precedent to this scenario: when a hyperscaler declined a planned expansion at a large Texas campus in March 2026, the developer re-let roughly 900 MW to another hyperscaler within weeks.

One useful nuance from the CBRE data is that demand in Dallas Fort Worth has shifted toward requirements below 75 MW. A 200 to 250 MW block may clear faster if you can subdivide it, which is a design decision worth making before you need it.

What does not work, and why each one costs money to learn

Battery storage cannot be dropped onto a load position. ERCOT requires a storage resource to go through the generator interconnection process under a separate agreement, so the load position does not convert. Merchant revenue has also fallen to roughly $29,000 per MW-year from a 2023 peak near $193,000, so even where interconnection is solvable the economics no longer are.

Crypto is bridge revenue rather than a destination. Curtailment credits are real but volatile, hashprice has compressed, and switching end use activity is itself a change ERCOT reviews and may treat as material.

Four coincident peak avoidance is the largest near-term number available, worth roughly $40,000 to $76,000 per MW-year, which on a 200 to 250 MW position is $8 million to $19 million a year for curtailing during four fifteen-minute intervals. But the mechanism is under active review with an eye to eliminating it. Do not underwrite value on it beyond the near term.

Demand response participation is smaller than most models assume. Average controllable load resource participation across all of ERCOT in 2025 was roughly 240 MW, and ancillary service prices fell sharply.

Against all of these, re-leasing to compute at $1.2 million to $2.4 million per MW-year is not a close comparison. The alternative-use paths are bridges to a relet, not substitutes for one.

Water is the easiest thing to shed

This is the mirror image of the electrical position, and the contrast is instructive.

The El Paso Water agreement lets the customer terminate at any time and for any reason on notice, assign without the utility's prior consent to a future owner of the property, and blocks the utility from reducing the capacity allocation without the customer's sole-discretion consent. Temple and Amarillo are tighter, with no at-will exit, but none of the three executed agreements carries take-or-pay, so unused water capacity is not an ongoing cost.

Where those termination and assignment rights exist, water is the easiest stranded commitment on a campus to release. Where they do not, the exposure is still usually small, because the absence of take-or-pay means holding costs nothing. The detail is covered properly in Your electrical position gets examined. The water contract and the development agreement get signed.

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The next action

Plan recovery as a land-and-entity transaction, not a regulatory one.

Establish your security tier before you model anything. Whether your project meets the Planning Guide Section 9.2.1.2(1) maturity criteria determines a 20 or 50 percent subtraction. That is the single largest input to what comes back.

Price the position against the Graham benchmark rather than against a hoped-for capacity transfer. Roughly $467,000 per MW for land plus interconnection assets, with the interconnection carrying the value.

Check whether the block can be subdivided. Demand has shifted toward sub-75 MW requirements. A block that can be split clears faster than one that cannot.

Take regulatory counsel before marketing. A statewide review of interconnection requests was ordered in August 2026, covering ownership and control of each project. Whether energized facilities are exempt is not established, and a change of control during the review may attract scrutiny.

The thing not to do is spend six months pursuing a capacity reassignment the rule does not permit. That path is closed, it was closed deliberately, and the Commission explained why.

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Revision log

September 14, 2026, revision 1. Initial publication. This article separates the recovery material from the tenant-credit article, where it first appeared. An earlier version of that article stated that no transfer mechanism exists for a large load interconnection request. That was wrong, and the correction is carried here: capacity reassignment is prohibited while the request transfers with the project entity.

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