Texas to consider $5.4 billion in loans for new natural gas plants

The Texas Public Utility Commission will consider extending $5.38 billion in low-interest loans to companies planning nearly 10 gigawatts (GW) of new natural gas-fired capacity in an effort to increase generating capacity for ERCOT.

The Texas regulator said it has selected a total of 17 proposed new power generation projects and a total requested loan amount of $5.38 billion under its so-called In-ERCOT Generation Loan Program Texas Energy Fund. These projects will now move to the due diligence stage, the Commission said.

NRG Energy, NextEra, Constellation Energy, Engie and Vistra projects have all advanced in the review process.

The Texas Energy Fund was established in 2023 by the Texas Legislature through Senate Bill 2627, the Powering Texas Forward Act, to provide grants and loans to finance the construction, maintenance, modernization and operation of electric facilities in Texas.

The Texas Energy Fund provides financing opportunities for electric power generation projects through four programs based on an application process and award system developed by the Public Utility Commission of Texas (PUCT).

In the most recent application process for the In-ERCOT Generation Loan Program, PUCT received during the July application period a total of 72 applications seeking more than $24 billion in financing for projects representing more than 38,000 megawatts of the proposed new dispatchable generation.

Commenting on the shortlisted projects, PUCT President Thomas Gleeson said:

“This is a huge step forward in our continued work to meet the rapidly growing demand for electricity in our state.”

“Each application was closely reviewed, and the projects selected to move forward will have the greatest impact in meeting the needs of the ERCOT grid and ensuring long-term electric reliability in Texas,” Gleeson added.

Texas used a record amount of electricity on Aug. 20, the Electric Reliability Council said last week.

Earlier in the year, ERCOT estimated that electricity demand in the Lone Star State could double in six years, requiring the urgent addition of more generating capacity.

By Charles Kennedy for Oilprice.com

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