Governor Greg Abbott has announced a new Texas Energy Fund (TxEF) loan agreement to support the construction of a 721 megawatt natural gas power plant near Baytown. The facility will be built by NRG Energy, Inc. and is expected to begin generating electricity for the Electric Reliability Council of Texas (ERCOT) region by summer 2028.
“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.”
Public Utility Commission of Texas (PUC) Chairman Thomas Gleeson stated, “The Texas Energy Fund is bringing reliable, affordable power to ERCOT’s fastest growing regions. 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.”
Robert J. Gaudette, Executive Vice President and President of NRG Business and Wholesale Operations, commented on the economic impact: “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. 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.”
This agreement marks the third finalized under TxEF’s In-ERCOT Generation Loan Program, which offers low-interest loans for projects adding dispatchable generation capacity within ERCOT. It is also NRG’s second loan from TxEF. The project has an estimated total cost of $936 million. Of this amount, $562 million—about 60%—will be provided through a 20-year loan from PUC at a 3% interest rate.
The facility is currently under construction at NRG’s Cedar Bayou Generating Station in Chambers County. Once operational, it will connect to one of ERCOT’s largest demand centers—the Houston Load Zone—which covers Houston, Pasadena, Sugar Land and ranks as one of America’s major metropolitan areas.
Under terms set by the In-ERCOT Generation Loan Program rules, minimum performance standards must be met by the facility.
The TxEF is managed by PUC using a competitive application process along with thorough financial review for all proposed projects.
Beyond these three approved agreements—including this latest announcement—there are currently fourteen additional applications undergoing due diligence review for potential funding through TxEF’s program. These pending projects represent proposals for another 7,671 MW in new dispatchable generation capacity intended for ERCOT.
Further details about both TxEF and its loan programs can be found on the PUC website.
