Texas Commission Establishes Grant Program for Utilities, Generators Outside ERCOT Region

The Texas Public Utility Commission Feb. 13 approved a new rule establishing a new program titled “Texas Energy Fund (TEF) Outside of Electric Reliability Council of Texas (ERCOT) Grant Program,” to provide grants to utilities and generators outside of the ERCOT region. Grants made available through this program will support modernization, reliability, resiliency, weatherization, and vegetation management efforts.

The ERCOT region accounts for around 75 percent of the geographic area of Texas. A number of electric utilities that provide power to Texas households and businesses are not geographically positioned within ERCOT. In accordance with the permitted rule, power producers and Texas electric utilities located outside of the ERCOT area could apply for grants under the program. The rule details the grant application process, review, and award amounts, while individual grant agreements will specify project monitoring and assessment requirements.

The Outside ERCOT Grant Program is one of four TEF initiatives established under the Powering Texas Forward Act. The rule creating the Outside ERCOT Grant Program is the third TEF rule implemented by the commission. The Completion Bonus Grant Program rule and the In ERCOT Generation Loan Program rule were both adopted during the first half of 2024.

The In-ERCOT Generation Loan Program offers low interest loans to fund new construction or enhancements to existing dispatchable power generating assets within the ERCOT electricity area. The Completion Bonus Grant Program offers performance-based grants for building or expanding dispatchable power generation in the ERCOT region.