"Texas continues to grow as more people choose to raise their families and build their businesses in the energy capital of the world.”
– Governor Greg Abbott
Texas Insider Report: AUSTIN, Texas – Governor Greg Abbott announced the third Texas Energy Fund (TxEF) loan agreement for a 721 megawatt (MW) natural gas power plant near Baytown. NRG Energy, Inc. (NRG) will build the plant, which is estimated to begin generating power by summer 2028 and will serve the Electric Reliability Council of Texas (ERCOT) power region.
"Texas continues to grow as more people choose to raise their families and build their businesses in the energy capital of the world,” said Governor Abbott. “This 721 MW investment in the Texas grid will ensure the state continues to meet and provide for this incredible growth with a robust, reliable supply of energy to power Texas homes and businesses.”
"The Texas Energy Fund is bringing reliable, affordable power to ERCOT’s fastest growing regions,” Public Utility Commission of Texas (PUC) 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.”
“Development of the new unit at our Cedar Bayou power plant will generate significant construction jobs, and once online in 2028 will provide additional permanent jobs, enhanced grid stability and regional economic growth,” said Executive Vice President, President of NRG Business and Wholesale Operations, Robert J. Gaudette. “We are grateful to Governor Abbott, the Texas Legislature, and the PUC for being great partners in helping power Texas forward as electricity demand surges.”
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.
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.
Additional information about the TxEF and the In-ERCOT Generation Loan Program is available on the PUC website.
