The Public Utility Commission of Texas on March 21 adopted a new rule implementing the Texas Energy Fund In-ERCOT Generation Loan Program.
This program will incentivize the construction of new dispatchable electric generating facilities or the expansion of existing facilities within the Electric Reliability Council of Texas region by providing low-interest loans to qualifying companies.
The new rule establishes the application process, project eligibility requirements, evaluation criteria, and loan terms. The rule will be posted in PUCT Docket No. 55826.
Through the In-ERCOT Generation Loan Program, entities can apply for a low-interest loan to finance upgrades to existing dispatchable electric generating facilities or the construction of new facilities in the ERCOT region.
Qualifying projects must add at least 100 MW of new dispatchable generation capacity to the grid.
The rule establishes procedures for applying for a loan, outlines the criteria the PUCT will use when evaluating applications, and details the terms for repayment.
The rule also specifies performance standards that will be included in the terms of the loan. The program can support the installation of up to 10,000 MW of new or upgraded generation capacity in the ERCOT region.
The Texas Legislature established the Texas Energy Fund through passage of Senate Bill 2627, the Powering Texas Forward Act, in 2023.
The rule adopted on March 21 specifically establishes the In-ERCOT Generation Loan Program, one of four Texas Energy Fund programs.
The other three programs within the TEF include Completion Bonus Grants for new dispatchable generation projects that consistently provide power generation over a ten-year period, grants for companies to establish or secure Back-Up Power resources, and grants to improve the resiliency and availability of electric utility service outside the ERCOT region.
The TEF has $5 billion available for all four programs, and additional funding may be provided by the legislature in future years.
Beginning May 1, 2024, potential applicants to the In-ERCOT Generation Loan Program may submit an optional Notice of Intent to Apply to the PUCT.
The PUCT will begin accepting applications for the loan program on June 1, 2024, and initial disbursements for approved loans will be issued by Dec. 31, 2025.
More information on the TEF and the In-ERCOT Generation Loan Program is available on the PUCT website.
