Texas Governor Greg Abbott on Sept. 26 announced the third Texas Energy Fund (TxEF) loan agreement for a 721 megawatt natural gas power plant near Baytown.
NRG Energy, Inc. will build the plant, which is estimated to begin generating power by summer 2028 and will serve the Electric Reliability Council of Texas power region.
"The Texas Energy Fund is bringing reliable, affordable power to ERCOT’s fastest growing regions,” Public Utility Commission of Texas Chairman Thomas Gleeson said. “With the 721 MW this new facility will add, the TxEF In-ERCOT Loan Program is already bringing 1,299 new MWs to the ERCOT grid – enough electricity to power hundreds of thousands of Texas homes and businesses, with more on the way.”
The loan agreement between the PUC and NRG is the third finalized under the TxEF’s In-ERCOT Generation Loan Program, which provides low-interest loans for projects that add new, dispatchable power to the ERCOT region. It is the second TxEF loan received by NRG.
Under the loan agreement, total project costs are estimated to be $936 million. The PUC is providing a 20-year TxEF loan of $562 million, or 60% of the total project cost, at a 3% interest rate. The loan term runs from Sept. 26, 2025, through Sept. 25, 2045.
The natural gas generation facility is under construction at NRG’s existing Cedar Bayou Generating Station in Chambers County. The project will interconnect in the ERCOT Houston Load Zone, one of the largest electricity demand centers in Texas, which includes Houston, Pasadena, and Sugar Land, and is the fifth largest metropolitan area in the United States.
Under the loan agreement, the facility must meet minimum performance standards, as outlined in the In-ERCOT Generation Loan Program rules.
The TxEF is administered by the PUC through a competitive application process and rigorous financial review of proposed projects.
The Kerrville Public Utility Board, a Texas public power utility, made history with the first project to execute a loan agreement under the 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.
In addition to the three loan agreements already approved, there are currently 14 applications to the TxEF In-ERCOT Generation Loan Program moving through a due diligence review process. Together, the projects represent an additional 7,671 MW of proposed, new dispatchable generation for the ERCOT grid.
