Texas Gov. Greg Abbott on Oct .14 announced the fourth Texas Energy Fund (TxEF) loan agreement for a 460 megawatt natural gas power plant in Fairfield, Texas. Calpine Corporation will build the plant which is expected to begin generating power for the Electric Reliability Council of Texas power region before summer 2026.
“The Texas Energy Fund has now brought nearly 1,800 megawatts of new, reliable power generation to the state of Texas – and there’s more on the way,” said Public Utility Commission of Texas (PUC) Chairman Thomas Gleeson. “We are investing in the future of every region of our state and strengthening the foundation for continued electric reliability and growth.”
The loan agreement between the PUC and Calpine is the fourth 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.
Under the loan agreement, total project costs are estimated to be $464 million.
The PUC is providing a 20-year TxEF loan of $278.3 million, or 60% of the total project cost, at a 3% interest rate. The loan term runs from October 27, 2026, through December 31, 2045.
The natural gas generation facility is under construction adjacent to Calpine's Freestone Energy Center in Freestone County.
The project will interconnect in the ERCOT North Load Zone, which includes the Dallas-Fort Worth metroplex.
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 four loan agreements already approved, there are currently 13 applications to the TxEF In-ERCOT Generation Loan Program moving through a due diligence review process. Together, the projects represent an additional 7,211 MW of proposed, new dispatchable generation for the ERCOT grid.
