Houston Daily

Governor Greg Abbott has announced the first Texas Energy Fund (TEF) loan agreement, which will finance a 122 megawatt natural gas power plant in Texas. This project, executed by the Public Utility Commission of Texas (PUC), is known as the Rock Island Generation Project. It aims to provide reliable and dispatchable power near one of the largest electricity demand centers in the Electric Reliability Council of Texas (ERCOT) region.

"As Texas continues to rapidly grow, we must further fortify the state power grid," stated Governor Abbott. He emphasized that this investment will ensure affordable and reliable power for Texans and help support high-demand areas.

PUC Chairman Thomas Gleeson commented on the project's significance: “The goal of the Texas Energy Fund has always been clear: secure reliable, affordable power that will serve the state for decades to come.” He noted that achieving this milestone brings new power closer to being operational.

Mike Wittler, KPUB General Manager & CEO, described it as a "historic milestone" for their utility. The Kerrville Public Utility Board (KPUB) sponsors the project and is responsible for its development. Operations are expected to commence by June 1, 2027.

The PUC's loan agreement with KPUB is part of TEF’s In-ERCOT Generation Loan Program, offering low-interest loans for projects enhancing ERCOT region's power supply. Total project costs should not exceed $175 million, with a TEF loan of up to $105 million over 20 years at a 3% interest rate. The facility will be located in Colorado County and connect to South Texas Electric Cooperative's Rock Island substation.

The agreement includes performance standards as outlined in program rules. Currently, there are 18 other active applications under review in this program representing an additional potential capacity of 9,102 MW for ERCOT's grid.

Further details about TEF and its programs can be found on PUC's website.