Vistra Joins Rush for Dispatchable Generation Loans
More than 145 Entities Have Applied for Texas Energy Fund
Vistra wants to convert its coal-fired Coleto Creek Power Station to gas-fueled.
Vistra wants to convert its coal-fired Coleto Creek Power Station to gas-fueled. | Vistra
Vistra says it plans to add nearly 2 GW of gas-fired capacity to the ERCOT grid over the next year and seek loans through the Texas Energy Fund.

Vistra, Texas’ largest generator, said May 30 it plans to add nearly 2 GW of gas-fired capacity to the ERCOT grid over the next year by investing in existing power plants to increase their output. 

The capacity additions will help meet ERCOT’s and the Public Utility Commission’s desire for more dispatchable (i.e., thermal) generation necessary to meet the state’s growing demand. 

“Texas is in the enviable position of experiencing sustained economic growth, which includes rapidly increasing power demand as a result of population growth and electrification activities in a number of areas, including transportation, data centers, manufacturing and industrial activities,” Vistra CEO Jim Burke said in a news release 

Vistra said it was filing a notice of intent to seek disbursements from the $5 billion Texas Energy Fund (TEF)’s Generation Loan Program. The program is designed to drive more dispatchable energy to the ERCOT system.  

The PUC said June 1 it had received 125 notices of intent totaling $38.9 billion in financing for 55.9 GW of proposed dispatchable projects, fulfilling the hopes of some participants that the TEF would be oversubscribed (56455). 

Formal applications now can be submitted by entities that submitted a notice of intent. Completed loan applications must be filed by July 27. The first disbursements, financing up to 60% of a loan, should be issued by Dec. 31, 2025. 

The commission established the TEF in March because of state legislation passed last year. Qualifying projects must add at least 100 MW of dispatchable capacity to the grid. The PUC says the program can support up to 10 GW of new or upgraded generation capacity in ERCOT. (See Texas PUC Establishes $5B Energy Fund.) 

Through Luminant, its generation subsidiary, Vistra plans to: 

    • Build up to 860 MW of advanced, simple-cycle peaker plants in West Texas, supporting the increased power demands of the state’s oil and gas industry. 
    • Repower its coal-fired Coleto Creek Power Plant as a gas-fired unit and use the existing infrastructure to provide up to 600 MW of capacity when the coal plant retires in 2027 to comply with EPA rules. 
    • Complete several upgrade projects at its existing gas plants, adding more than 500 MW of summer capacity and 100 MW of winter capacity. 

Vistra said its quick-start gas units would help back up the grid when renewable resources are not available and battery storage resources have reached their limits. Nearly half of the capacity would come online this summer and the remainder next summer. 

All three projects are based on market reforms passed during the 2023 legislative session that include new ancillary services, the performance credit mechanism and an effective reliability standard. The company said implementation could offer the regulatory framework needed to incentivize long-term investments in the grid. 

“Since the market opened to competition, over $100 billion has been invested by a wide range of investors in a variety of power generation technologies to meet the growing needs of Texans,” Burke said. “The ERCOT market has a history of attracting generation owners who put their capital at risk when there are investment signals.” 

The projects are contingent upon other factors, including state and federal environmental regulations and long-term wholesale trends that continue to support gas generation, Vistra said. 

Company NewsNatural GasPublic Utility Commission of Texas (PUCT)

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