NOTICE DATE: January 25, 2026

NOTICE TYPE: M-A012526-01 Operations

SHORT DESCRIPTION: Notice of U.S. Department of Energy Section 202(c) Order Affecting Certain Customers with Backup Generation Facilities in the ERCOT Region

INTENDED AUDIENCE: Customers with Data Centers, Industrial Facilities, and Commercial Facilities with Backup Generation

DAYS AFFECTED: January 25-27, 2026

LONG DESCRIPTION: On January 24, 2026, ERCOT requested an emergency order from the U.S. Secretary of Energy ("Secretary") pursuant to Section 202(c) of the Federal Power Act ("FPA") due to the expected impact of Winter Storm Fern on electric demand, which raises a significant risk of emergency conditions that could jeopardize electric reliability and public safety. ERCOT submitted the request in response to the Secretary's January 22, 2026 letter announcing that such orders would be provided with respect to backup generation facilities.

The Secretary granted ERCOT's request and issued an order the same day finding that an emergency exists within the State of Texas that requires intervention to preserve the reliability of the bulk power system.  On January 25, 2026, the Secretary issued an amended order. The amended order authorizes ERCOT, as the Reliability Coordinator and Balancing Authority for the ERCOT interconnection, to "direct backup generation resources at data centers (including but not limited to hyperscaler facilities), and at other large load industrial and commercial Customer sites (whether auxiliary, standby, directly-connected, battery storage or other, and whether synchronized or not to the bulk power system), to operate after ERCOT deploys all available market services, except for frequency responsive services, before declaring an Energy Emergency Alert (EEA) 3 (i.e., before firm load interruption) or during an EEA 3." The order also requires the affected Customers to operate those backup generators when directed by ERCOT under the circumstances described in the order. 

ERCOT clarifies that nothing in the Secretary's order or this Market Notice requires any Customer to use its backup generation facilities unless ERCOT issues an email explicitly directing the Customer to transition to using its backup generation facilities as described in this notice.  

The order states that it does not apply to any backup generators serving a critical reliability or backup need, including those at defense facilities, homeland security facilities, first responder facilities, air traffic control facilities, hospital facilities, 911 call centers, water treatment or wastewater facilities, natural gas pipeline facilities, natural gas gathering facilities, or other similar facilities. Additionally, any Customer facility with backup generation that is enrolled in ERCOT's Emergency Response Service, ERCOT's Aggregated Distributed Energy Resource (ADER) pilot project, or a Transmission and/or Distribution Service Provider (TDSP) load management program or that is registered with ERCOT as a Resource, may not participate.  If a Customer that has already been notified of participation is not eligible to participate, the Customer must notify ERCOT of its ineligibility.

The order is effective immediately and will remain effective through 11:59 PM Eastern Standard Time on Tuesday, January 27, 2026.  A copy of the amended order is attached to this Market Notice.  ERCOT has already notified, or will promptly notify, each data center Customer that the U.S. Department of Energy (DOE) has identified to ERCOT as being subject to the order.  Any other data center Customer, industrial Customer, or commercial Customer with backup generation at least 1 MW in size that wishes to opt in to the mandatory deployment provisions of this order may do so by submitting an email with the following information to BUGComms@ercot.com for each facility the Customer wishes to enroll:

• Company name
• 24x7 point of contact email address and phone number
• Total facility load
• Total backup generation MW capability
• Facility address
• Name of interconnecting utility (i.e., TDSP) 

Upon receiving email confirmation of enrollment, the Customer will be considered enrolled and will be subject to compliance with an ERCOT directive that may be issued during the specified conditions for the duration of this weather event, as further described in this Market Notice. 

If the specific conditions described in the Secretary's order materialize during this winter weather event, ERCOT will send an email communication to each affected Customer that has been identified to ERCOT as having backup generation facilities. The email communication will instruct each affected Customer to transition to using its backup generation to serve its facility load.  Upon receiving such instruction, each affected Customer must promptly transition to using its backup generation facilities to serve its facility's demand.  Once ERCOT notifies the Customer that it is no longer being directed to use its backup generators, the Customer will no longer be authorized under the Secretary's order to use its backup generation facilities following a reasonable period for orderly ramp down, as further described in the order.  Affected Customers must observe all federal and state environmental requirements except to the limited extent necessary to comply with an ERCOT directive, as described in the Secretary's order.

Any directive issued under this order will be directed only to the Customer and not to the Customer's TDSP or the Transmission Operator (TO) for the Customer's TDSP.  ERCOT directives issued under this order are not intended to require any action by the affected TDSP or TO even if the Customer does not comply with ERCOT's directive. The fact that a Customer has been enrolled to receive an ERCOT directive issued under this order does not exempt the Customer from disconnection due to TO action in compliance with an ERCOT firm load-shedding directive under EEA Level 3.   

Nothing in this Market Notice or the Secretary's order permits a backup generator to synchronize with the ERCOT grid if it has not completed the Generator Interconnection or Modification Process and received written approval to synchronize from ERCOT as described in Section 5 of the ERCOT Planning Guide.  For any backup generator that has not received ERCOT approval to synchronize with the ERCOT Grid, a Customer may comply with any ERCOT directive under this Market Notice only by disconnecting a portion of the Customer's load from the ERCOT grid and serving it with the backup generator.

If ERCOT directs qualifying backup generators to operate, ERCOT will notify the DOE and provide DOE a list of all Customers that were directed to use their backup generators pursuant to the Secretary's order.  Paragraph F of the Secretary's order also requires ERCOT to provide such information regarding the environmental and other impacts of the order and the compliance of qualifying backup generation facilities with the order as requested by DOE from time to time. Any Customer that ERCOT directs to operate under the terms of the Secretary's order must provide ERCOT the information necessary to facilitate ERCOT's compliance with its reporting responsibilities under the order.

A Customer's compliance with any directive issued under the Secretary's order is subject to all of the terms and conditions stated in that order, whether or not stated in this Market Notice.  In the event of any conflict between this Market Notice and the Secretary's order, the Secretary's order governs.

ERCOT intends to seek further relief under FPA Section 202(c) for other generating facilities in the ERCOT region due to the ongoing weather emergency and will issue a Market Notice if such relief is obtained.

CONTACT: If you have any questions, please contact your ERCOT Account Manager. You may also call the general ERCOT Client Services phone number at (512) 248-3900 or contact ERCOT Client Services via email at ClientServices@ercot.com.

If you are receiving email from a public ERCOT distribution list that you no longer wish to receive, please follow this link in order to unsubscribe from this list: http://lists.ercot.com.

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