Oct 10, 2026 · Research · 6 min

Documentation and financial security under §25.194

ERCOT’s August audit presentation describes eligibility rows supported by attestations, with examples of additional evidence staff may request. The applicable rows differ by eligibility path.

The order adopting 16 TAC §25.194 addresses false, inaccurate and unverifiable information in subsection (j)(2), page 268. The third category concerns whether supporting documents can establish the information’s accuracy or completeness.

Under §25.194(j)(2), the customer may be deemed to have forfeited posted financial security, and ERCOT may reallocate allocated transmission capacity in a future study. These are discretionary remedies. The rule was adopted September 18, 2026. The October 2 Texas Register records an October 8 effective date at 51 TexReg 6875.

A statement need not be proved false for unverifiability to matter. But one missing file does not automatically establish the condition or trigger forfeiture. The question is whether responsive supporting documentation verifies the information, under the applicable audit process.

It reaches back

§25.194(j)(2) covers what a customer provided under the rule or under ERCOT Planning Guide Section 9, as of the effective date. Section 9 is where Batch Zero lives. Page 263 states it outright in §25.194(h)(2): ERCOT and Commission staff may audit everything a large load provided or attested to under Section 9, and a customer that cannot produce documents backing its accuracy may lose its allocated capacity.

ERCOT’s September 3 notice announced conditional classifications. It identifies verification and other conditions, including applicable data and good-cause requirements. The August 20 audit presentation says failure to pass verification or respond leads to disqualification. Separately, §25.194(j)(2) permits forfeiture of security within its stated scope.

The August presentation scheduled additional information gathering and cure opportunities for October and November, with a verification report planned for December 10. These are the presentation’s planned dates, not evidence that the steps have been completed. Our interpretation is that responses should be prepared with the effective rule’s audit provisions in view; the presentation alone does not resolve the legal treatment of any particular response.

Seven signatures

Slide 12 lists eleven eligibility-package rows with submitted material, excluding the separate site-verification row marked N/A. Seven describe attestations. The slide labels the further documents as examples of additional evidence. It does not say every applicant filed all eleven requirements or that each example is the only acceptable supporting document.

Slide 11 shows where the signatures cluster. A base load not yet energized qualifies through path (e) or (f) of Planning Guide §9.2.1.1(1). The three requirements unique to path (e) are long-lead equipment, notice to proceed, and end-use customer confirmation. The three unique to path (f) are site approvals, a binding general contractor contract, and a binding substation contractor contract. All six went in as attestations.

These requirements concern evidence of project commitment. That is the analytical connection between the eligibility screen and the audit. A customer should be able to support an attestation with responsive evidence when requested. Slide 12 provides examples; it does not independently make a particular named file mandatory in every case.

The rule repeats it

The adopted rule’s audit provision, §25.194(j), allows ERCOT and Commission staff to request information necessary to verify attested information. The interconnecting provider must coordinate production of responsive supporting documents. Section (j)(1) addresses failure to comply with the audit process or produce supporting documentation. An attestation and the evidence that supports it therefore serve different purposes.

The practical distinction is between what accompanies an initial submission and what must be available for a later request. A signed declaration is not a substitute for a maintainable supporting record.

What to have in hand

For each applicable requirement, retain the attestation, supporting documents, dates, responsible owner and any unresolved inconsistency. This is Pallara’s recommended evidence-management method, not an additional filing format imposed by §25.194. A missing record should trigger review of what the request actually requires; it is not itself a legal determination of forfeiture.

The remedies described in §25.194(j)(1)-(2) are discretionary. The coordination and production duties in subsection (j) use mandatory language. Distinguishing the duty from the possible consequence avoids suggesting either automatic forfeiture or an optional response to an audit.

The 20% the preamble drops

A second provision reads differently in the rule than in the order’s own preamble.

When a project falls 24 months behind its phased energization schedule, taken as a whole, the utility has 30 days to notify ERCOT. Within 60 days of that notice it draws the security and applies it to amounts owed: incurred costs and nonrefundable equipment, construction and services, and the minimum billing demand under §25.193. The preamble on page 212 says the utility then returns the balance. The rule text on page 259, §25.194(g)(3), says the utility first subtracts 20% of the security tied to the unused capacity, and only then returns what is left. Only the signed rule text governs.

Take one unused megawatt whose security was set by the $50,000 per megawatt leg, with nothing owed. Under the preamble, $50,000 comes back. The rule returns $40,000. The March proposal would have returned $10,000.

Corrections go to corrections@pallara.xyz.

Pallara represents no applicant and takes no position on any project. Decision support, not legal advice. The original provenance record documents the earlier edition; it does not certify this revision. This October 26 review links the primary sources used for the corrected claims.

Factual review: October 26, 2026. Original publication date retained. Primary sources are linked alongside the revised claims.