House Bill No. 3970 introduces a new section, 39.169, to the Utilities Code, focusing on the interconnection and operation of large loads within the ERCOT power region. The bill defines key terms such as "behind-the-meter generation" and "flexible load," and mandates the establishment of a program by the commission to expedite the interconnection process for large loads. This program will prioritize interconnection for large loads that have received approval for expedited processing over those without contractual agreements. Additionally, it outlines requirements for large loads to qualify for expedited processing, including the installation of behind-the-meter generation and the possibility of alternative qualifications based on peak demand.

The bill also stipulates that large loads qualifying for expedited interconnection may contract with approved vendors for necessary studies and procure equipment as authorized by relevant utilities. It allows for the evaluation of flexible loads as non-firm during studies and mandates that demand reductions from these loads during energy emergencies count towards load-shedding obligations. Furthermore, the independent organization overseeing ERCOT will consider actions taken under this section as reliability deployments for pricing adjustments. The commission is tasked with establishing financial penalties for large load operators who fail to comply with directives related to load reduction or backup generation. The act is set to take effect on September 1, 2025.

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