The NRG loan agreement is the third finalized under a Texas Energy Fund-administered program that provides low-interest loans for projects that add new, dispatchable power to the ERCOT region. It is the second loan received by NRG under the program, which is known as the In-ERCOT Generation Loan Program.
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A new loan agreement under the Texas Energy Fund — this one for a 721 megawatt natural gas power plant near Baytown— has been announced by the governor’s office and the Public Utility Commission.
The Texas Energy Fund is a $10 billion subsidy program created by the Texas Legislature to help finance the development of dispatchable generation. State lawmakers established the program in the aftermath of Winter Storm Uri that led to statewide outages.
Houston-based NRG Energy will develop the plant, and it should begin producing power for the ERCOT region by the summer of 2028, according to the PUC in a Sept. 26 release.
“With the 721 MW this new facility will add, the (Texas Energy Fund) In-ERCOT Loan Program is already bringing 1,299 new megawatts to the ERCOT grid — enough electricity to power hundreds of thousands of Texas homes and businesses, with more on the way,” PUC Chairman Thomas Gleeson said in a statement.
The NRG loan agreement is the third finalized under a Texas Energy Fund-administered program that provides low-interest loans for projects that add new, dispatchable power to the ERCOT region. It is the second loan received by NRG under the program, which is known as the In-ERCOT Generation Loan Program.
Under the agreement, total project costs are estimated to be $936 million. The PUC is providing a 20-year Texas Energy Fund loan of $562 million, or 60 percent of the total project cost, at a 3 percent interest rate. The loan term runs from Sept. 26, 2025, through Sept. 25, 2045, according to information released by the PUC.
NRG will build the natural gas generation facility at its existing Cedar Bayou Generating Station in Chambers County. The plant will interconnect in the ERCOT Houston Load Zone that includes Houston, Pasadena, and Sugar Land and which comprises one of the nation’s largest metropolitan areas..
In addition to the three loan agreements already approved, 14 other applications remain in the Texas Energy Fund In-ERCOT Generation Loan Program queue. These projects are moving through a due diligence review process and together would represent an additional 7,671 MW of dispatchable power for the ERCOT grid, according to the PUC.