Governor Greg Abbott has announced a 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 generating 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,” Governor Abbott said. “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 noted, “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, stated: “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.”
The loan agreement between NRG and PUC is part of TxEF’s In-ERCOT Generation Loan Program. This program offers low-interest loans for projects that add new dispatchable generation capacity within ERCOT’s territory. For this project, total costs are estimated at $936 million. The PUC will provide a $562 million loan over twenty years at an interest rate of three percent—covering about sixty percent of total costs—with repayment scheduled from September 26, 2025 through September 25, 2045.
The plant is under construction at NRG’s existing Cedar Bayou Generating Station located in Chambers County. Once completed, it will interconnect into ERCOT’s Houston Load Zone—a major center for electricity demand that includes cities such as Houston, Pasadena, and Sugar Land.
As part of its terms with TxEF’s In-ERCOT Generation Loan Program rules, the facility must meet certain minimum performance standards.
The Public Utility Commission administers TxEF through a competitive application process involving detailed financial reviews. Beyond these three approved loans—including two awarded to NRG—fourteen additional applications are currently undergoing due diligence review under this program. These proposals together represent up to 7,671 megawatts in potential new dispatchable generation capacity for ERCOT.
Further details about TxEF and its programs can be found on the PUC website.
