Texas Makes Big Loads Post $50,000 a Megawatt to Connect; Newsom Signs the Monopoly Bill With a Warning and Licenses Business Lenders

The bottom line today

The Public Utility Commission of Texas has told every data center developer in the ERCOT queue what a seat at the table costs: $50,000 a megawatt, cash for the wires, and a 20% haircut for walking away [1]. The rule takes effect Thursday, October 8 [1]. Pratt’s read is mostly favorable. A 300 MW campus that wants the grid built for it should carry the risk of not showing up, and this rule makes it carry that risk. The flaw is reach: the rule applies to every large load not yet energized, including industrial projects that have been waiting on transmission for years [1]. California, meanwhile, closed out its signing season with a mixed hand for employers, and three of those bills had not yet been read here [3].

TX Texas SB 6: what data centers must post to connect to ERCOT

What it does. SB 6, by Sen. King, told the commission to set interconnection standards for large loads “in a manner designed to support business development in this state while minimizing the potential for stranded infrastructure costs and maintaining system reliability” [2]. It set a default threshold of 75 megawatts and a screening study fee of at least $100,000 [2].

The commission’s new 16 TAC §25.194 applies to a new interconnection of 75 MW or more, an expansion that crosses 75 MW, and an expansion that adds 75 MW or more [1]. In order:

• Before the ERCOT study. The customer signs an intermediate agreement, files disclosures and posts $50,000 per MW [1].
• At the standard agreement. Security becomes the greater of $50,000 per MW of contracted peak demand or the upgrade costs the study assigns [1]. Direct interconnection costs are paid in cash, with no allowance, and are not refundable [1]. An invoice unpaid for 10 working days lets the utility draw on the security and cancel the request [1].
• Walking away. Withdraw some or all of the contracted demand and the utility keeps 20% of the security tied to it, after costs [1]. Miss the phased energization schedule by 24 months and the unused capacity is treated the same way [1].
• Getting it back. The utility returns 20% at energization and the rest in 20% steps as the customer meets its minimum-bill milestones [1].

The disclosures run long: competing requests elsewhere in Texas, water volume and source, cooling technology, backup generation, power supply plans and permit milestones, all attested by an officer and open to audit by ERCOT and commission staff [1, 2]. False or unsupported filings can bring penalties or loss of allocated capacity [1].

Where it stands. SB 6 passed the Senate 31-0 and the House 103-25 and was signed June 20, 2025 [2]. The commission filed the rule September 18 under Project No. 58481; it was published October 2 and is effective October 8 [1].

Pratt’s read. Credit first. The commission dropped a separate interconnection fee it had proposed, lets cash posted early count toward later security, and said the final design “best balances support for business development and the need to minimize the potential for stranded infrastructure costs” [1]. That is the statute’s own test, and the rule meets it. Every manufacturer and retailer on an ERCOT bill is better off when a speculative campus, not the rate base, pays for its own substation. The cost-allocation half of the Texas plan, including the minimum bill this rule leans on, was the subject of this release on July 27.

The cost lands on projects already in line. Texas Industrial Energy Consumers asked the commission to exempt loads that had signed agreements and paid what was asked, noting that many Permian Basin loads may not be allowed to energize until upgrades are finished in 2030 [1]. The commission declined, saying old agreements lack uniformity and that the Legislature wrote no grandfather clause into this section [1]. An oil field load waiting on a line it did not delay now faces the same 24-month clock and 20% forfeiture as a developer flipping a site. On the other side, the Office of Public Utility Counsel wanted the rule to catch loads that grow piecemeal or split sites below 75 MW [1]. Residential customers’ advocate and industrial buyers both had a point. The commission split the difference in favor of standardization.

CA California AB 1776: signed, with a note to the courts

What it does. AB 1776, by Assembly Majority Leader Cecilia Aguiar-Curry, adds a single-firm monopolization and monopsonization ban to the Cartwright Act, requires proof of “substantial market power,” limits enforcement to the Attorney General and district attorneys, and exempts businesses with 100 or fewer employees and $10 million or less in average receipts [5]. This release covered its final passage on September 2.

Where it stands. Signed September 30 and chaptered as Chapter 826 [4, 5].

Pratt’s read. The governor’s signing message reads like the opposition’s letter. He wrote that “we must be careful not to set the bar too low,” that substantial market power should be treated as a necessary but not sufficient condition for liability, and that “additional legislation may be required to clarify the appropriate standards” [4]. Supporters, Aguiar-Curry among them, say the state needs tools against companies that “crushed their competition and can now raise prices unchecked” [3]. Fair goal. But a signing message is not statute. The opponents, including Airlines for America, the Biotechnology Innovation Organization and California Life Sciences, will price the risk from the text, not from the governor’s hopes for how judges read it [5].

CA California AB 2116: a license for merchant cash advances

What it does. AB 2116, by Assemblymember Pilar Schiavo, brings commercial financing of $500,000 or less to small businesses with up to $16 million in annual receipts under the California Financing Law, covering commercial loans and non-loan products such as factoring and merchant cash advances [6]. From July 1, 2028, providers and brokers need a license from the Department of Financial Protection and Innovation [6]. The bill bans confessions of judgment or powers of attorney taken before default, and contract clauses that gag a borrower about terms [6]. Brokers must post their average and maximum APR on their websites, providers must file annual reports, and an unlicensed provider’s agreement entered on or after January 1, 2028 is unenforceable [6].

Where it stands. It passed 73-0 in the Assembly, 38-0 in the Senate and 76-0 on concurrence, and became Chapter 823 [6]. The Senate Appropriations Committee put the department’s cost at $1.57 million the first year and $1.46 million after, to be offset by licensee assessments [6].

Pratt’s read. Business sits on both sides, and the borrowers have the better case. Supporters include Small Business Majority, United Chambers of Commerce, the Santa Clarita Valley Chamber and two finance companies, Kapitus and Rapid Finance [6]. The Revenue Based Finance Association, which backed licensing but not the bill’s added section, warned that “The DFPI has an existing backlog of pending CFL license applications” [6]. That is the risk to watch: a 2028 deadline that a slow licensing desk turns into a credit freeze for the shops these products serve. The confession-of-judgment ban is overdue.

CA California AB 1693: retailers get the restaurant permit lane

What it does. AB 1693, by Assemblymember Rick Chavez Zbur, extends to retailers the self-certification path the Legislature gave restaurants in 2025 [7]. At the applicant’s expense, a licensed architect or engineer can certify that tenant improvement plans meet building, health and safety codes, under penalty of perjury [7]. The building department must approve or deny within 20 business days, and review corrected resubmissions only for the cited deficiencies within 10 [7]. Departments must audit at least 20% of certified projects each week, cities may set certifier training, fees and a size floor no lower than 10,000 square feet, and certifiers are liable for negligent plan review [7]. Restaurants and fast food outlets are excluded [7].

Where it stands. Passed 77-0, 39-0 and 79-0 on concurrence; signed as Chapter 827 [7].

Pratt’s read. The California Building Officials opposed it, arguing that “the person designing the plans should not be the one offering final approval” [7]. The audit requirement answers much of that. The CalChamber and the California Retailers Association backed it [7]. A 20-day answer is worth real money to a store paying rent on an empty space, and this column has no quarrel with the bill.

On the calendar

The Texas large load standards take effect October 8 [1]. California’s AB 2116 provisions become operative January 1, 2028, and licensing is mandatory from July 1, 2028 [6].