Rayburn Electric Cooperative has broken ground on Rayburn Energy Station 2, a US$685 million natural gas peaking plant in Sherman, Texas, that will add 570 megawatts of dispatchable capacity to the state’s embattled power grid. The facility comprises 10 individual peaking units of 57 megawatts each, a configuration purpose-built for rapid response during peak demand events rather than continuous baseload operation. On normal days the adjacent Rayburn Energy Station 1, a combined cycle baseload unit acquired by Rayburn in 2023, handles routine generation; the new station fires up only when grid conditions demand it. Construction is expected to span 18 to 24 months, with commercial operations targeted for June 2028. The project was partially funded through a Texas Senate bill enacted in the aftermath of the catastrophic February 2021 winter storm, making Rayburn Energy Station 2 one of the only cooperative-owned recipients of that grid resilience legislation. On completion, the facility will have the capacity to serve more than half a million homes, propelling Sherman into the select group of roughly 25 Texas cities capable of generating over a gigawatt of combined power.

A Grid in Need of Backup, and a Cooperative Answering the Call

What distinguishes Rayburn Energy Station 2 from a conventional generation addition is its black start designation, meaning the plant can restart independently following a total grid collapse without drawing power from the wider network. In a state where the 2021 grid failure left millions without power for days, that capability carries significant weight. Sherman Mayor Shawn Teamann noted that the plant will be among the first in Texas to restore power in the event of a catastrophic grid failure, allowing other plants to cascade back online in sequence. This positions the facility as critical infrastructure in the truest sense, not simply a megawatt counter on a planning spreadsheet. Texas is not alone in this buildout; the Southeast Texas market is experiencing a parallel surge in generation investment, most visibly through Entergy Texas’s US$799 million Lone Star Power Station near Cleveland, another natural gas facility targeting mid-2028 completion and designed to serve over 110,000 homes. Together, these projects reflect a statewide reckoning with grid adequacy following years of capacity shortfalls, with cooperatives and investor-owned utilities alike accelerating capital deployment ahead of what forecasters expect will be record demand peaks in the summers ahead.

Project Fact Sheet

• Project Name: Rayburn Energy Station 2
• Location: Sherman, Texas, United States
• Project Value: US$685 million
• Client / Owner: Rayburn Electric Cooperative
• Technology: Natural gas peaking plant (10 units at 57 MW each)
• Total Installed Capacity: 570 megawatts
• Homes Served: More than 500,000 (conservative estimate)
• Special Designation: Black start facility; grid independence on restart
• Construction Duration: 18 to 24 months
• Expected Commercial Operation: June 2028
• Jobs Created: Several hundred construction positions; 10 to 15 permanent operational roles
• Strategic Impact: Elevates Sherman into the group of approximately 25 Texas cities with over 1 GW of combined generation capacity; funded in part through post-2021 winter storm grid resilience legislation

Project Team

• Client / Owner: Rayburn Electric Cooperative
• Chief Executive: David Naylor, President and CEO, Rayburn Electric Cooperative
• Mayor / Municipal Authority: City of Sherman, Texas
• Regulatory Authority: Public Utility Commission of Texas
• Grid Operator: Electric Reliability Council of Texas (ERCOT)
• Likely EPC Contractors: Firms with established Texas gas peaker experience such as Kiewit Power, Burns & McDonnell, or Wood Group are typical candidates for projects of this scale and configuration
• Financing: Cooperative internal capital and funding allocated through Texas Senate grid resilience legislation administered via the Public Utility Commission of Texas