Dive Brief:
- A $936 million NRG Energy gas plant under development in the Electric Reliability Council of Texas market will receive a low-interest loan from the Public Utility Commission of Texas covering 60% of the costs, according to a Friday announcement by Gov. Greg Abbott’s office.
- The 721-MW facility is the third gas project selected by the Texas Energy Fund’s In-ERCOT Generation Loan Program, which incentivizes new gas plant development. Texas voters authorized the fund in 2023.
- The loan fund is managed by the PUCT and last year regulators selected an initial 17 generation projects totaling almost 10 GW for consideration. Though some projects were replaced after dropping out or being removed, the fund has now finalized loans supporting nearly 1.3 GW of capacity.
Dive Insight:
NRG’s new gas unit, at the existing Cedar Bayou Generating Station in Chambers County, will interconnect in the ERCOT Houston Load Zone. Regulators say it is one of the largest demand centers in ERCOT, which as a system is anticipating about 152 GW of new load by 2030.
The TEF is “bringing reliable, affordable power to ERCOT’s fastest growing regions,” PUCT Chairman Thomas Gleeson said in a statement.
Along with the 721-MW Cedar Bayou project, the PUCT has finalized loans for a 122-MW gas plant being developed by the Kerrville Public Utility Board and two NRG units totaling 456 MW of capacity at its existing TH Wharton Generating Station, also in the Houston area.
NRG officials said the new Cedar Bayou unit will generate “significant construction jobs, and once online in 2028 will provide additional permanent jobs, enhanced grid stability and regional economic growth.”
Under the agreement, the PUCT is providing a 20-year TEF loan of $562 million, or 60% of the project’s total $936 million cost, at a 3% interest rate. The loan term runs from Sept. 26, 2025, through Sept. 25, 2045, the commission said.
Along with the three finalized loans, PUCT officials say the other 14 applications are “moving through a due diligence review process” that represent 7,671 MW of dispatchable generation for the ERCOT grid.
Among those is a third project by NRG, a 455-MW gas-fired unit at its Greens Bayou facility.
