Texas rejects state funding for 1.3 GW natural gas plant project

Texas regulators have denied state funding for a 1.3-gigawatt natural gas-fired power plant because the applicant failed to meet due diligence, days after the project became eligible for interest-bearing loans down from the Texas Energy Fund.

The Public Utility Commission of Texas (PUCT) has rejected NextEra and Aegle Power’s application for the newly established fund’s In-ERCOT Generation Loan Program.

“The application has failed the due diligence phase of the loan application process and the project will not be eligible to receive a loan from the TEF. NextEra Energy notified the PUCT this week that it is not a party to the loan application,” the commission said in a statement.

NextEra Energy Resources Vice President and General Counsel Mitchell Ross wrote to the PUCT earlier this week saying, “Please be advised that NextEra’s name was submitted to the Aegle application without NextEra’s knowledge or consent.”

“NextEra is not seeking funding as part of the TEF Program, is not participating in the project for which NextEra was named, and hereby requests that NextEra be immediately removed from PUCT’s records as a sponsor for the Aegle Power project,” Ross wrote on behalf of the company.

After denying Aegle Power’s application, the Texas Commission said that at this time, 16 applications for the In-ERCOT Generation Loan Program remain under due diligence review.

The PUCT is currently considering extending $5.38 billion in low-interest loans to companies planning nearly 10 GW of new natural gas-fired capacity in an effort to boost generation capacity for ERCOT.

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.

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 Tsvetana Paraskova for Oilprice.com

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