Governor Abbott Announces Texas Energy Fund Loan To 456 MW Natural Gas Facility In Houston

Governor Greg Abbott today announced the second Texas Energy Fund (TEF) loan agreement will fund a 456 megawatt (MW) natural gas power plant in Houston. The plant, being built by NRG Energy Inc. (NRG), is currently slated to begin operations by Summer 2026 and will serve the Electric Reliability Council of Texas (ERCOT) power region.
 
“Texas is the top energy producer in the nation—fueling growth and innovation across our state and around the world,” said Governor Abbott. “This 456 megawatt investment in the Texas grid will help bear the load of the largest electricity demand area in the state, further ensuring reliable and affordable power for countless homes and businesses in the greater Houston area. By investing in reliable, dispatchable energy, we will build a stronger, more powerful Texas for generations to come.”
 
“This new power plant marks another major investment in Texas and in the ERCOT grid, helping prepare our state’s power supply to meet the demands of the future,” said Public Utility Commission of Texas (PUC) Chairman Thomas Gleeson. “The Texas Energy Fund is accomplishing exactly what the Governor and the Texas Legislature envisioned—securing reliable, on-demand power to fuel Texas’ rapid growth and continued success.”
 
“We are grateful to Governor Abbott, the Texas Legislature, and the PUC for being terrific partners in helping power Texas forward as electricity demand surges,” said Executive Vice President, President of NRG Business and Wholesale Operations Robert J. Gaudette. “The development of our new units at TH Wharton is already providing significant construction jobs, and once online next year will provide additional permanent jobs, enhanced grid stability, and regional economic growth.”
 
The loan agreement between the PUC and NRG is the second finalized under the TEF’s In-ERCOT Generation Loan Program, which provides low-interest loans for projects that add new, dispatchable power to the ERCOT region. Under the loan agreement, total project costs are estimated to be less than $360 million. The PUC is providing a 20-year TEF loan up to $216 million, or 60% of total cost, at a 3% interest rate. The loan term runs from July 31, 2025, through July 30, 2045.
 
NRG will develop the natural gas facility at its existing TH Wharton Generating Station in Houston. The facility is under construction and is currently slated to begin operations by Summer 2026. The project will interconnect in the ERCOT Houston Load Zone, one of the largest electricity demand centers in Texas, including Houston, Pasadena, and The Woodlands. This area makes up the fifth largest metropolitan area in the United States.
 
Under the loan agreement, the facility must meet minimum performance standards, as outlined in program rules.
 
The Texas Energy Fund is administered by the PUC through a competitive application process and rigorous financial review of proposed projects. 
 
In addition to the two loan agreements already approved, which together represent 578 MW, there are currently 15 applications to the TEF In-ERCOT Generation Loan Program that are active and moving through a due diligence review process. Together, they represent an additional 8,392 MW of proposed, new dispatchable generation for the ERCOT grid.  
 
Additional information about the TEF and the In-ERCOT Generation Loan Program is available on the PUC website.