Governor Greg Abbott has announced a new Texas Energy Fund (TxEF) loan agreement for 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,” 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, commented on the economic impact: “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 agreement between PUC and NRG marks the third finalized loan under TxEF’s In-ERCOT Generation Loan Program. This program offers low-interest loans for projects that add new dispatchable generation capacity within ERCOT. It is also NRG’s second loan from TxEF. The project cost is estimated at $936 million; PUC will provide a 20-year loan covering $562 million—about 60% of total costs—at a 3% interest rate. The loan period extends from September 26, 2025 through September 25, 2045.
Construction is underway at NRG’s existing Cedar Bayou Generating Station in Chambers County. The plant will connect to ERCOT’s Houston Load Zone—a major demand center including Houston, Pasadena, and Sugar Land—and forms part of one of America’s largest metropolitan areas.
The facility must comply with minimum performance standards set out by In-ERCOT Generation Loan Program rules. The TxEF is managed by PUC through a competitive application process that includes thorough financial review.
Currently there are fourteen additional applications under review for possible TxEF loans through this program. If approved, these projects could add another 7,671 megawatts of dispatchable generation capacity to ERCOT.
More information about TxEF and its programs can be found on the Public Utility Commission website.
