The Kerrville Public Utility Board, a Texas public power utility, made history recently with the first project to execute a loan agreement under the newly established Texas Energy Fund, following a ceremonial signing held June 25 with leadership from the Public Utility Commission of Texas in Austin, Texas.
Alongside the TEF loan agreement, KPUB finalized the issuance of tax-exempt revenue bonds, completing the utility’s full financing strategy for its generation project.
With funding secured, KPUB is now set to begin construction on its 122-megawatt natural gas-fired facility. The electric utility’s generation plant will be located in Colorado County, approximately 10 miles south of Columbus, Texas, and about 75 miles west of Houston.
The site was selected for its immediate access to four natural gas pipelines -- an advantage not available in Kerr County.
Additionally, its proximity to existing substation and transmission infrastructure makes it an ideal location, allowing the utility to leverage existing infrastructure and access additional operational resources.
The project is designed to deliver fast-start, dispatchable generation that supports grid reliability and ratepayer stability during peak demand and extreme weather events.
With this loan agreement, KPUB becomes the first recipient of financing under the TEF’s In-ERCOT Generation Loan Program and remains the only municipally owned utility among the program’s finalists.
“Having a municipally owned utility lead the way with the first project approved under the Texas Energy Fund is a tremendous honor for our industry,” said Mike Wittler, KPUB General Manager & CEO. “This marks a historic milestone for our utility and is the result of the dedication, vision, and countless hours of hard work from our board, staff, and partners.”
“With this funding secured, we’re proudly powering forward with a long-term strategic initiative that will not only help shield our ratepayers from future market volatility but also enhance grid reliability for all Texans,” added Wittler.
The $175 million project will be funded in part by a $105 million TEF loan. Under the loan agreement, which is subject to customary financial closing procedures, the PUCT will provide a 20-year loan at a 3 percent interest rate through the TEF’s In-ERCOT Generation Loan Program.
The remainder will be financed through tax-exempt revenue bonds, which are set to close simultaneously with the TEF loan, resulting in full project funding.
The plant is modeled after the nearby Sky Global Power One facility, a 50-megawatt reciprocating internal combustion engine (RICE) plant developed to serve San Bernard Electric Cooperative.
That facility achieved 99.6% availability during Winter Storm Uri in 2021—despite widespread power generation failures statewide.
Building on that success, KPUB’s new natural gas-fired power generation plant will be equipped with six larger, more advanced engines provided by Everllence (formerly MAN Energy Solutions), a global leader in engine manufacturing. These high-efficiency, quick-start engines are designed to deliver reliable performance with minimal water usage, making them ideal for fast-response power generation.
"The project’s engineering and design are led by SEnergy, a trusted KPUB partner, with Summit Industrial serving as general contractor and Sky Global Partners managing development and long-term plant operations," the utility noted.
“This project came together at exactly the right time, with the right partners, and a shared vision,” said Wittler. “We’ve assembled an incredibly experienced and efficient team—from engineering and construction to operations and finance—that solidifies the success of this generation plant for the financial benefit of our customers."
KPUB was one of only 16 projects selected from 72 applicants for the TEF program, which was created by the Texas Legislature and ratified by voters in November 2023 to add up to 10,000 megawatts of new, dispatchable power across the ERCOT system.
Construction is expected to begin in fall 2025, with commercial operations targeted for June 2027.
The borrower for this project is the Kerrville Public Utility Board Public Facility Corporation, a public non-profit corporation organized for the benefit of and administered by the Kerrville Public Utility Board.
Kerrville, Texas-based KPUB was acquired by the City of Kerrville in 1987. KPUB serves approximately 24,500 customers throughout its 146-square-mile service area, including Kerrville, Center Point, Ingram, Hunt, and surrounding areas in Kerr County.
