Governor Greg Abbott has announced a new Texas Energy Fund (TxEF) loan agreement to support the construction of a 721 megawatt natural gas power plant near Baytown. The facility, to be built by NRG Energy, Inc., is expected to begin producing electricity by summer 2028 and will serve the Electric Reliability Council of Texas (ERCOT) region.
“Texas continues to grow as more people choose to raise their families and build their businesses in the energy capital of the world,” said Governor Abbott. “This 721 MW investment in the Texas grid will ensure the state continues to meet and provide for this incredible growth with a robust, reliable supply of energy to power Texas homes and businesses.”
Public Utility Commission of Texas (PUC) Chairman Thomas Gleeson stated, “The Texas Energy Fund is bringing reliable, affordable power to ERCOT’s fastest growing regions. With the 721 MW this new facility will add, the TxEF In-ERCOT Loan Program is already bringing 1,299 new MWs to the ERCOT grid – enough electricity to power hundreds of thousands of Texas homes and businesses, with more on the way.”
Robert J. Gaudette, Executive Vice President and President of NRG Business and Wholesale Operations, said, “Development of the new unit at our Cedar Bayou power plant will generate significant construction jobs, and once online in 2028 will provide additional permanent jobs, enhanced grid stability and regional economic growth. We are grateful to Governor Abbott, the Texas Legislature, and the PUC for being great partners in helping power Texas forward as electricity demand surges.”
This marks the third finalized loan under TxEF’s In-ERCOT Generation Loan Program. The program provides low-interest loans for projects that increase dispatchable power capacity within ERCOT. This is also NRG’s second loan from TxEF. The total cost for this project is estimated at $936 million; PUC is providing a $562 million loan over 20 years at an interest rate of 3%. The loan period extends from September 26, 2025 through September 25, 2045.
The new generation facility is being constructed at NRG’s existing Cedar Bayou Generating Station in Chambers County. It will connect into ERCOT’s Houston Load Zone—a major center for electricity demand that includes Houston, Pasadena, Sugar Land—and ranks as one of America’s largest metropolitan areas.
The agreement requires that performance standards are met according to In-ERCOT Generation Loan Program rules. The TxEF is managed by PUC through a competitive process that involves financial review.
Currently there are fourteen additional applications under review for potential loans from TxEF’s In-ERCOT Generation Loan Program. These proposals could bring an extra 7,671 megawatts of dispatchable generation capacity to ERCOT if approved.
More details about TxEF and its programs can be found on the PUC website.
