The Kerrville Public Utility Board (KPUB) has taken a significant step forward in its power generation project, with the KPUB Board of Trustees unanimously approving two key resolutions during its March 7 special called board meeting, the Texas public power utility said.
These approvals pave the way for securing financing and finalizing agreements for KPUB’s proposed natural gas-fired power generation facility. The next step will be obtaining approval from the Kerrville City Council on March 11, 2025.
The approved resolutions authorize bond financing for KPUB’s power generation facility.
Resolution No. 25-05 approves funding through the KPUB Public Facility Corporation (KPFC) and a power sales agreement, while Resolution No. 25-01 authorizes the issuance of power supply revenue bonds, sets pricing parameters, and approves key financial agreements.
“With these approvals, we are advancing a long-term strategic initiative for our customers to provide more stability in our rates,” said Mike Wittler, KPUB General Manager & CEO.
“Our next step is presenting the project to the Kerrville City Council for approval on March 11, and we look forward to continuing our discussions with the community about this important investment.”
KPUB’s proposed power generation project is being developed through the Texas Energy Fund (TEF) In-ERCOT Generation Loan Program, which was established by the Texas Legislature and the Public Utility Commission of Texas (PUCT) to promote the development of new dispatchable power generation in the ERCOT market.
The TEF is a key part of Texas’s strategy to enhance grid reliability, providing low-interest loans to municipal utilities and cooperatives to build or upgrade natural gas-fired power plants.
The program aims to add up to 10,000 MW of new generation capacity to the Texas power grid.
KPUB was one of only 17 projects selected from 72 applicants to advance in the TEF loan process, demonstrating its proposed project's viability, financial stability, and technical merits.
“One of KPUB’s largest power supply contracts, which supplies a significant portion of our power portfolio, will expire in the next few years,” Wittler explained. “This project is part of our strategic plan to explore the benefits of owning our own generation to maintain stable rates for customers in an increasingly volatile energy market."
The proposed project is a natural gas-fired reciprocating internal combustion engine (RICE) generation plant, capable of producing up to 122 MW at peak capacity. RICE technology offers key advantages, including high efficiency, minimal water usage and performance in extreme weather conditions.
While the facility will not remove KPUB from the ERCOT market, it will work in conjunction with an updated hedging program to offer additional protection from volatile market prices -- especially during extreme weather events like Winter Storm Uri in 2021.
The project also aligns with ERCOT’s forecast that Texas will need nearly double its current power capacity by 2030.
KPUB will present the project for final approval to the Kerrville City Council on March 11, 2025.
Pending approval, KPUB will move forward with securing financing and advancing project development.
The power generation plant would be located outside of KPUB’s service area and is expected to become operational in June 2027.
“KPUB remains committed to keeping the community informed about its generation planning efforts,” it noted.
Detailed information, presentation recordings, and a comprehensive FAQ section are available on KPUB’s website at kpub.com/power.
