Texas Public Utility Commission issues $216 million loan for NRG's 456-megawatt gas power plant
Texas Energy Fund Finances New Gas Power Plants to Strengthen State's Power Supply
The Texas Energy Fund (TEF) is actively financing new natural gas power plant projects to strengthen the Electric Reliability Council of Texas (ERCOT) dispatchable power supply and meet growing demand in high-load areas.
In a significant move, two loans have been finalized and awarded under the TEF's In-ERCOT Generation Loan Program.
- Rock Island Generation Project
The first loan, worth up to $105 million at a 3% interest rate over 20 years, is supporting the Rock Island Generation Project, a 122 MW natural gas facility in Colorado County. The project, scheduled to be operational by June 1, 2027, will receive the funding to cover part of its estimated $175 million cost.
- NRG Energy's TH Wharton Generating Station
The second loan, worth $216 million, has been awarded to NRG Energy for two new natural gas units totaling 456 MW at its TH Wharton Generating Station in Houston. This loan covers about 60% of the $360 million project cost, has a 3% interest rate, and a 20-year term running from July 2025 through July 2045. The plant is expected to be online by summer 2026 to meet high demand in the Houston Load Zone, driven by data centers, AI computing, and extreme weather.
The TEF In-ERCOT Generation Loan Program aims to provide up to $10 billion, including $7.2 billion dedicated to dispatchable generation. Beyond these two approved projects adding a combined 578 MW, 15 additional applications are under review, potentially adding 8,392 MW more of dispatchable capacity.
The loans carry favorable terms (3% interest over 20 years) to reduce project financing costs, catalyzing investments despite previous challenges like supply chain issues or project cancellations.
PUCT Chairman Thomas Gleeson stated that the new power plant is another major investment in Texas and the ERCOT grid, helping secure reliable, on-demand power for the state's rapid growth and continued success. NRG Executive Vice President Robert Gaudette echoed this sentiment, stating that demand for electricity in Texas is surging, and they are working quickly to supply new dispatchable natural gas generation to the grid.
The Texas Energy Fund, as envisioned by the Governor and the Texas Legislature, is accomplishing its goal of securing reliable, on-demand power to fuel Texas' growth and success. The loan for the NRG project was announced by state regulators on Aug. 4. The new gas units will be developed at NRG's existing TH Wharton Generating Station in Houston.
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