Texas Approves Loan for NRG Energy’s 456-Megawatt Natural Gas Plant

Texas Governor Greg Abbott on Aug. 4 announced a loan agreement between the Public Utility Commission and NRG Energy Inc. under the Texas Energy Fund, or TEF, to support a 456-megawatt (MW) natural gas-fired power plant in Houston. This marks the second loan agreement under the TEF’s In-ERCOT Generation Loan Program, designed to provide low-interest loans for projects that add dispatchable power to the region served by the Electric Reliability Council of Texas.

The plant, being developed by NRG Energy, is slated to begin operations by Summer 2026. Total project costs are estimated to be under $360 million, and the commission is providing a loan of 60 percent of total cost, at a 3 percent interest rate, for a 20-year term beginning July 31, 2025. The facility is required to meet minimum performance standards in accordance with the program rules.

The natural gas facility is under construction at NRG Energy’s existing TH Wharton Generating Station in Houston. The facility will interconnect to the grid in the ERCOT Houston Load Zone, a major demand center.

The two loan agreements approved so far represent 578 MW of generating capacity. Currently, 15 applications to the In-ERCOT Generation Loan Program – representing 8,392 MW of proposed dispatchable generation – are under review. The program is one of four TEF initiatives established under the Power Texas Forward Act passed by voters through a constitutional election in 2023. The other three are: ​​Completion Bonus Grant Program, Outside ERCOT Grant Program, and Texas Backup Power Package Program.

The TEF is administered by the commission through a competitive application process and thorough financial review of proposed projects. The initiative aims to bolster resource adequacy in Texas by providing low-interest loans and grants for the construction and upgrade of dispatchable generation resources, primarily natural gas plants.