In August 2025, the Public Utility Commission of Texas and Governor Greg Abbott announced that NRG Energy Inc. had secured up to $216 million in financing through the Texas Energy Fund for a 456-megawatt natural gas power plant in Houston. The project, approved as the program’s second loan agreement, will supply the Electric Reliability Council of Texas (ERCOT) grid and is expected to begin operations in 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.
Managed by the Public Utility Commission of Texas, the Texas Energy Fund supports grid reliability through competitively bid, financially vetted loans for new dispatchable generation. The program’s first executed loan financed the 122-MW Rock Island Generation Project, sponsored by the Kerrville Public Utility Board (KPUB) and announced on June 26, 2025. Its second loan supported NRG Energy’s 456-MW natural gas plant in Houston (up to $216 million), bringing the first two projects to a combined 578 MW of capacity; that award was announced by the PUCT and the governor in August 2025. Additional applications remain under review. Among approved projects, the largest to date is the 1,350-MW CPV Basin Ranch Energy Center in West Texas.
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
