Houston Daily

Governor Greg Abbott has announced a Texas Energy Fund (TEF) loan agreement to support the construction of a 456 megawatt (MW) natural gas power plant in Houston. The project, led by NRG Energy Inc., is expected to begin operations by summer 2026 and will supply electricity to the Electric Reliability Council of Texas (ERCOT) power region.

“Texas is the top energy producer in the nation—fueling growth and innovation across our state and around the world,” said Governor Abbott. “This 456 megawatt investment in the Texas grid will help bear the load of the largest electricity demand area in the state, further ensuring reliable and affordable power for countless homes and businesses in the greater Houston area. By investing in reliable, dispatchable energy, we will build a stronger, more powerful Texas for generations to come.”

Public Utility Commission of Texas (PUC) Chairman Thomas Gleeson noted that this development is part of ongoing efforts to secure energy reliability for Texas: “This new power plant marks another major investment in Texas and in the ERCOT grid, helping prepare our state’s power supply to meet the demands of the future. The Texas Energy Fund is accomplishing exactly what the Governor and the Texas Legislature envisioned—securing reliable, on-demand power to fuel Texas’ rapid growth and continued success.”

Robert J. Gaudette, Executive Vice President and President of NRG Business and Wholesale Operations, emphasized local economic benefits: “We are grateful to Governor Abbott, the Texas Legislature, and the PUC for being terrific partners in helping power Texas forward as electricity demand surges. The development of our new units at TH Wharton is already providing significant construction jobs, and once online next year will provide additional permanent jobs, enhanced grid stability, and regional economic growth.”

The TEF’s In-ERCOT Generation Loan Program provides low-interest loans for projects that add new dispatchable power capacity within ERCOT’s jurisdiction. Under this agreement with NRG Energy Inc., total project costs are estimated at under $360 million. The PUC will provide a 20-year loan up to $216 million—covering 60% of total costs—at a 3% interest rate from July 31, 2025 through July 30, 2045.

The facility will be built at NRG’s existing TH Wharton Generating Station site in Houston. Once operational, it will connect to ERCOT’s Houston Load Zone—a region that includes Houston, Pasadena, and The Woodlands—and serves as one of the largest electricity demand centers both statewide and nationally.

As part of its requirements under program rules, NRG must ensure that performance standards are met at this new facility.

The PUC administers TEF through a competitive application process involving thorough financial review. Currently, two approved loan agreements account for a combined total of 578 MW of new generation capacity. There are also 15 active applications under review that could add an additional 8,392 MW to ERCOT if approved.

Further details about TEF programs can be found on the Public Utility Commission website.