The Texas Energy Fund is a $10 billion subsidy program created by the Texas Legislature to help finance the development of dispatchable generation.
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Another subsidized loan agreement under the Texas Energy Fund — the sixth to date — has been announced by Gov. Greg Abbott and the Texas 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.
The newest loan agreement is for a 455 megawatt (MW) natural gas power plant in the Houston area. NRG Energy will build the plant, which is expected to begin generating power for the Electric Reliability Council of Texas power region in 2028.
Agency chair Thomas Gleeson said that with the addition of the NRG facility, the TEF has now financed more than 3,500 megawatts of new dispatchable power.
The Details
Under the loan agreement, total project costs are estimated to be approximately $617 million. The PUCT is providing a 20-year TEF loan up to $370 million, or 60 percent of total costs, at a 3 percent interest rate. The loan term runs from Nov. 20, 2025, through Nov. 20, 2045.
NRG will build the facility at its existing Greens Bayou Generating Station in Harris County. The project will interconnect in the ERCOT Houston Load Zone, one of the largest electricity demand centers in Texas, including Houston, Pasadena, and The Woodlands. This area makes up the fifth largest metropolitan area in the United States.
Other Projects
There are 11 other Texas Energy Fund In-ERCOT Generation Loan Program applications awaiting approval. Together, the projects represent 5,406 MW of new dispatchable generation for the ERCOT grid.
Other plants so far financed by the TEF include:
- A 1,350 megawatt (MW) natural gas power plant in Ward County, in West Texas.
- A 721-megawatt plant by NRG Energy to be located near Baytown.
- A 460-MW natural gas-fired plant by Calpine Energy to be located near Fairfield.
- A 456-megawatt natural gas power plant by NRG Energy in Houston.
- A 122-megawatt natural gas-fired facility by the Kerrville Public Utility Board in Colorado County west of Houston.
Additional information about the Texas Energy Fund and the In-ERCOT Generation Loan Program is available on the PUC website.