The Texas Public Utility Commission has executed the first loan agreement under the state’s low-interest energy fund to the Kerrville Public Utility Board, the developer of a 122-MW natural gas plant.
The loan agreement was finalized June 25 under the Texas Energy Fund’s In-ERCOT Generation Loan Program. The program has been allotted $5 billion by state lawmakers to help provide up to 10 GW of new gas-fired generation for ERCOT.
The PUC and Kerrville PUB agreed to a 20-year loan of up to $105 million for the Rock Island Generation Project at a 3% interest rate, subject to customary financial closing procedures. The project’s total costs are not to exceed $175 million, and the project must meet minimum performance standards, as outlined in the program’s rules.
The PUB says it will finance the remainder of the project through tax-exempt revenue bonds.
Rock Island will interconnect to the South Texas Electric Cooperative’s grid in ERCOT’s South load zone. Construction is scheduled to begin in the fall of 2025, and the plant is projected to begin operations by June 2027.
The site is almost 200 miles away from Kerrville, which is northwest of San Antonio. However, it has access to four natural gas pipelines, which was not the case in Kerrville.
Texas Gov. Greg Abbott (R) said in a statement that the plant, 75 miles away from the huge Houston load center, will “help bear the load of the largest electricity demand area in the state.”
The PUC is tracking 18 other applications in the In-ERCOT program’s due-diligence review, representing an additional 9.1 GW of gas generation.
