The Public Utility Commission of Texas (PUC) has closed a second loan agreement under the Texas Energy Fund (TEF), awarding up to $216 million to NRG Energy Inc. for the construction of a 456-megawatt natural gas-fired power plant in Houston. The facility will serve the Electric Reliability Council of Texas (ERCOT) grid and is to start operations by Summer 2026.
The 3% interest loan over 20 years from July 31, 2025, to July 30, 2045, will fund as much as 60% of the project’s estimated cost at $360 million. The In-ERCOT Generation Loan Program of the TEF is funding the construction of dispatchable power resources in Texas.
Grid Integration
The new plant is being built at NRG’s existing TH Wharton Generating Station and will feed electricity directly into ERCOT Houston Load Zone, including high-load locations such as Houston, Pasadena, and The Woodlands. The Houston area is the fifth largest metropolitan area in the U.S., and thus a strategic location for grid reliability.
This 456-megawatt investment in the Texas electric grid will help share the load of the state’s largest electricity consumption area,” said Governor Greg Abbott, calling it a significant step toward bringing the region dependable and affordable energy.
PUC Chairman Thomas Gleeson described the deal as “demonstrating the TEF’s mission: to secure reliable, on-demand power to drive Texas’ increasing growth and ongoing success.”.
The project is already generating building jobs, Executive Vice President of NRG Robert J. Gaudette stated, and will create additional permanent jobs when the plant comes online.
The PUC-managed TEF is part of a greater scheme to increase grid reliability through competitively bid, financially vetted loans. With the first two loan agreements now totaling 578 MW, the program has 15 other applications under consideration.
Read also: Texas Approves First $105M Loan for Natural Gas Plant Under New Energy Fund
Texas Energy Fund Issues $216M Loan to NRG for 456 MW Houston Power Plant: Project Factsheet
Project Overview
Developer: NRG Energy Inc.
Project Type: Natural gas power plant
Capacity: 456 megawatts
Location: Houston, Texas (TH Wharton Generating Station)
Target Operation Date: Summer 2026
Texas Energy Fund loan to NRG: Financing Details
Loan Amount: Up to $216 million
Interest Rate: 3% fixed
Term: 20 years (July 31, 2025 – July 30, 2045)
Project Coverage: 60% of total project cost
Total Project Cost: $360 million (estimated)
Funding Source: Texas Energy Fund In-ERCOT Generation Loan Program
Grid Integration
Grid Connection: Electric Reliability Council of Texas (ERCOT)
Load Zone: ERCOT Houston Load Zone
Service Area: Houston, Pasadena, The Woodlands metro region
