NRG Energy has closed on a $216 million loan from the Texas Energy Fund that will help it build 456 MW of gas-fired capacity at an existing power plant, the company said in a press release.
The funding will go toward the construction of two new natural gas units at NRG’s TH Wharton power plant in the Houston area, the fifth-largest metropolitan area in the U.S. The company said the units will deliver power to the constrained load zone by summer 2026.
“Demand for electricity across Texas is surging and we’re working quickly to supply new dispatchable natural gas generation to the grid,” said Robert Gaudette, president of NRG Business and Wholesale Operations, in an Aug. 4 statement.
The loan is just the second issued by the Public Utility Commission since the fund’s inception in 2024. The first went to the Kerrville Public Utility Board earlier in 2025. (See First Texas Energy Fund Loan Goes to Kerrville Utility.)
The 20-year loan, executed with the Public Utility Commission, will cover up to 60% of the projected $360 million cost, not to exceed $216 million, at a 3% interest rate through July 2045. The project must meet minimum performance standards, as outlined in the program’s rules.
The two units already are under construction.
NRG has two more projects with another 1 GW of capacity that are progressing through the TEF’s due diligence process. The PUC is reviewing 15 other applications for the TEF’s in-ERCOT program, representing an additional 8.4 GW of capacity. The program, designed to add about 10 GW of gas-fired generation to the Texas grid, was approved by voters in 2023.
Two companies recently withdrew their projects from consideration by the fund, which is administered by the PUC.
LS Power said in June that it pulled a 527-MW project out of due diligence “due to numerous factors” and is no longer pursuing funds from the TEF program. In July, Hunt Energy Network told the PUC that it was withdrawing another due-diligence project because it “does not align with the requirements and conditions of the TEF loan in a cost-effective manner.”
Six projects have been withdrawn by applicants or rejected by the PUC in 2025. (See 2 More Projects Fall out of TEF Loan Program.)
