Texas regulators have finalized a third loan agreement through the Texas Energy Fund’s in-ERCOT program with NRG Energy for a 721-MW natural gas-fired plant near Baytown in Houston’s dense petrochemical region.
Under the agreement, the Public Utility Commission of Texas will provide a 20-year loan of $562 million at 3% interest from the TEF. That will cover 60% of the project’s costs, estimated at $936 million.
Construction has already begun on the facility at NRG’s existing Cedar Bayou Generating Station, and the plant is expected to begin producing power by the summer of 2028. The project will be interconnected in the Houston Load Zone, the fifth-largest metropolitan area in the U.S.
“The Texas Energy Fund is bringing reliable, affordable power to ERCOT’s fastest-growing regions,” PUC Chair Thomas Gleeson said in a statement.
The TEF loan is NRG’s second under the fund’s in-ERCOT Generation Loan Program, one of four in the $10 billion program. The Houston-based company secured a $216 million loan in August to help build 456 MW of gas-fired capacity at another existing site in the region. (See NRG Energy Secures $216M Loan from TEF.)
Under the loan agreement, the facility must meet minimum performance standards. The PUC administers the TEF through a competitive application process and financial review of proposed projects.
The three in-ERCOT loans disbursed so far will add 1,299 MW to the Texas grid. A commission spokesperson said 14 applications are still moving through the program’s due diligence process, representing an additional 7,671 MW of capacity.
The $10 billion TEF, approved by voters in 2023, is designed to add 10 GW of gas-fired generation to the Texas grid.
