The Texas Public Utility Commission has selected 17 generation projects for further review as part of a $5 billion loan program intended to add dispatchable, or thermal, generation to the ERCOT grid.
During its Aug. 29 open meeting, the commission delegated authority to its executive director to enter into loan agreements with those applicants who can show “they’re worthy” after a due-diligence review. The projects, if completed, would add 9.78 GW of new dispatchable generation for $5.38 billion in state loans (56896).
The portfolio was culled from 72 applications under one of four Texas Energy Fund (TEF) programs approved last year by voters, the In-ERCOT Generation Loan Program. The applications sought more than $24 billion in low-interest funding for projects representing over 38 GW of dispatchable generation.
PUC staff and the TEF administrator assessed each of the applications based on applicants’ experience and financial strength, the proposed projects’ technical and financial attributes, and five commission priorities: diversity among applicant types, diversity in siting location, speed to market, ability to relieve transmission constraints and diversity of resource type.
“I’m happy with the recommendation. I think it’s an amazingly good job of weighing all the issues that the five commissioners brought to you throughout this process,” PUC Chair Thomas Gleeson told staff during the open meeting.
Should any projects fail the due-diligence review, staff could recommend additional applications for review. However, there is a March 2025 deadline to advance those projects for review. Initial disbursements for approved projects will be made before Dec. 31, 2025.
The list of 17 projects includes heavyweights like Calpine, Constellation Energy, NRG Energy and Vistra. It also includes local entities like Kerrville Public Utility Board and Rayburn Electric Cooperative. The projects range in size from 1,350 MW to 122 MW.
“We had 72 folks who were interested and wanted to, if you will, kind of get in the game,” Commissioner Jimmy Glotfelty said. “They put a lot of thought into it and hopefully … there’ll be an opportunity for more to come.”
“We are eager to see these projects break ground and are confident that the commission will proceed in such manner to ensure that the fund is used efficiently to deliver the reliable power,” Tony Bennett, CEO of the Texas Association of Manufacturers, said in a statement. “Texas needs to maintain its top spot as the best place to do business, grow jobs and strengthen communities.”
The TEF’s other programs include the completion bonus grants, outside ERCOT grants and the Texas backup power package. The fund was established in March because of state legislation that passed last year, with the February 2021 winter storm serving as the catalyst. 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.)
Stoic Energy principal and ERCOT observer Doug Lewin said in his weekly newsletter that 80% of the gas plants will be peakers and “will likely displace older, higher-polluting fossil fuel plants.”
“This was not unexpected, but it’s interesting to see that’s what actually happened,” he wrote, noting that gas availability was a “major problem” during the 2021 storm.
