Governor Greg Abbott on Friday, Sept. 26, announced the third Texas Energy Fund (TxEF) loan agreement for a new 721-megawatt (MW) natural gas power plant near Baytown. The facility, to be built by NRG Energy, Inc. (NRG), is expected to begin generating power 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 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 added: “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 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, said the project will boost jobs and economic growth. “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 the PUC and NRG is the third finalized under the TxEF’s In-ERCOT Generation Loan Program, which offers low-interest loans for new dispatchable power projects. This is the second TxEF loan received by NRG.
- Project cost: $936 million
- PUC loan: $562 million (60 percent of the total)
- Terms: 20 years at a 3 percent interest rate (Sept. 26, 2025 – Sept. 25, 2045)
The new natural gas unit is being built at NRG’s Cedar Bayou Generating Station in Chambers County. It will connect to the ERCOT Houston Load Zone, one of Texas’ largest electricity demand centers, serving Houston, Pasadena, and Sugar Land—the fifth-largest metropolitan area in the nation.
Under the loan agreement, the facility must meet minimum performance standards outlined in the program’s rules.
The TxEF is administered by the PUC through a competitive application process and rigorous financial review of proposed projects. Alongside the three approved loan agreements, 14 additional applications are under review, representing 7,671 MW of proposed new dispatchable generation for the ERCOT grid.
More information about the TxEF and the In-ERCOT Generation Loan Program is available on the PUC website.