Texas’ loan program for gas generation has lost two more projects, marking the third and fourth companies to withdraw projects from the due diligence review process.
Constellation and WattBridge became the latest to pull projects from the Public Utility Commission’s In-ERCOT Generation Loan Program, part of its Texas Energy Program. The companies took out four projects totaling 1,410 MW.
The 16 remaining applications total 8,346 MW of capacity and $4.46 billion in requested loan amounts. The TEF is a $5 billion, low-interest program designed by lawmakers to quickly add new natural gas plants.
PUC spokesperson Ellie Breed said staff intend to advance additional applications to the due diligence phase at a future open meeting.
Constellation was seeking financing for 300 MW of gas-fired generation at its Wolf Hollow III facility. It told the PUC in March it was unable to determine “with certainty” the project’s overall costs because of the “uncertain timing” in receiving an air permit from the Texas Commission on Environmental Quality. That would prevent Constellation from signing a binding loan document.
WattBridge withdrew three projects totaling 1,110 MW of capacity. It said the TEF’s financing terms “introduce risk and costs that result in lower than anticipated returns with elevated risks.”
The company also said it was withdrawing a 510-MW project in the Houston region from the pool of remaining applicants.
Two other companies pulled their projects from the TEF earlier in 2025. They cited supply chain issues as delaying the projects and keeping them from meeting a December 2025 deadline for initial loan disbursements. (See 2 Companies Withdraw Texas Energy Fund Projects from Consideration.)
More than 4,650 MW of capacity has been withdrawn or denied from the original submitted applications. Nearly a third (3,903 MW of 12,249 MW) of the projects that advanced to due diligence now have been withdrawn or denied.
“Texas will get new gas resources … but gas plants take time,” noted Stoic Energy principal Doug Lewin in his newsletter. “They can’t be developed fast enough to ensure reliability or allow for economic growth in the next three or four years, and possibly longer than that.”
Kristi Hobbs, ERCOT’s vice president of system planning and weatherization, told board members April 7 that all 16 Texas Energy Fund projects recommended for due diligence by the PUC have submitted full interconnection study (FIS) applications with the ISO and are in various phases of the generation-interconnection process. Seven applicants have completed the full study processes.
“Moving forward, a lot of progress on those,” Hobbs told the board.
The TEF was created by the Texas Legislature in 2023 to add more dispatchable generation to the grid and was approved by voters later that year. Managed by the PUC, it is designed to provide grants and loans to finance construction, maintenance, modernization and operation of electric facilities in the state.
The fund is composed of four programs: In-ERCOT Generation Loans, In-ERCOT Completion Bonus Grants, Outside-ERCOT Grants and Texas Backup Power Package.
