The troubled Texas Energy Fund has lost two more projects from its original list of applicants, raising questions about its ability to quickly add 10 GW of gas-fired dispatchable resources to the ERCOT grid.
Connie Corona, executive director of the Texas Public Utility Commission, said in identical filings April 15 that both applicants had “failed to meet due diligence requirements.” The orders are not subject to rehearing or appeal requests, she said (56896).
The loss of the two gas-fired projects from the list of applicants takes another 1,056 MW out of the TEF’s In-ERCOT portfolio. The 14 remaining applications total 7,284 MW of capacity and about $3.96 billion in requested loans, a PUC spokesperson said.
One of the projects belonged to EmberClear and Jupiter Island Capital, which proposed two 900-MW projects west of Houston. The other was proposed by Frontier Group of Companies for the Lone Star Industrial Park in East Texas, comprising two gas units with 162 MW of capacity. A 40-MW natural gas unit, commissioned in 1954 and once operated by Southwestern Public Service, sits in the park.
Four other companies have also withdrawn projects since 2025 began. (See Texas Loan Program Loses 2 More Gas Projects.)
Stoic Energy’s Doug Lewin said the TEF’s travails only emphasize the need for renewable energy and storage. He said that given ERCOT’s current projections of 44 GW of demand growth in the next four years (“As their midline,” he noted), Texas still will be 34 GW short even if the fund meets its 10-GW goal.
“It’s going to be even harder to meet rising demand without robust renewable and storage growth. There’s just no other resource else that can be developed that quickly,” he told RTO Insider.
More than 5,712 MW of capacity has been withdrawn or denied from the original submitted applications. More than 40% of the projects (4,965 of 12,249 MW) advanced to due diligence now have been withdrawn or denied.
The PUC has said staff intend to advance additional applications to due diligence review at a future open meeting. The commission next meets April 24.
George Castellanos, chief power officer for Frontier, said the New York-based firm was disappointed with the decision but praised the TEF’s review process.
“We remain confident in the strategic value of our project to support Texas’ long-term reliability goals,” he said in an email to RTO Insider.
Castellanos said the firm plans to continue the industrial park’s development. That includes reactivating the gas unit on site and adding another 114 MW of new capacity.
The state legislature created the TEF in 2023 to add more dispatchable generation to the grid. Voters approved it 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 comprises four programs: In-ERCOT Generation Loans, In-ERCOT Completion Bonus Grants, Outside-ERCOT Grants and the Texas Backup Power Package.
