Houston Daily

Governor Greg Abbott has announced a new Texas Energy Fund (TxEF) loan agreement to support the construction of a 460 megawatt natural gas power plant in Fairfield, Texas. The facility will be built by Calpine Corporation and is expected to start generating electricity for the Electric Reliability Council of Texas (ERCOT) region before summer 2026.

Governor Abbott stated, “Texans across our great state are benefiting from the reliable, affordable power that the Texas Energy Fund is helping add to the state grid, with hundreds of megawatts coming online. This 460 MW investment will further grow our power supply and keep prices affordable for homes and businesses in North Texas. We will ensure continued reliability for all Texans as we add more power and fortify the state grid.”

Public Utility Commission of Texas (PUC) Chairman Thomas Gleeson added, “The Texas Energy Fund has now brought nearly 1,800 megawatts of new, reliable power generation to the state of Texas – and there’s more on the way. We are investing in the future of every region of our state and strengthening the foundation for continued electric reliability and growth.”

Caleb Stephenson, Calpine Executive Vice President of Commercial Operations, said, “Calpine is proud to demonstrate our commitment to Texas with our new Pin Oak Creek Energy Center in Freestone County. This 460-megawatt, state-of-the-art facility is designed to start within minutes and will deliver safe, reliable power exactly when Texans need it most. We’re grateful for the leadership of Governor Abbott and the Texas Legislature and for their dedication to keeping energy reliable and affordable for all Texans. Calpine is excited to keep investing in Texas to support our growing communities.”

The PUC's agreement with Calpine marks the fourth finalized loan under TxEF’s In-ERCOT Generation Loan Program. The program provides low-interest loans for projects that bring new dispatchable energy sources into ERCOT’s territory. The total cost of this project is estimated at $464 million. The PUC will provide a $278.3 million loan—covering about 60% of costs—with a 3% interest rate over a 20-year term from October 13, 2025 through October 13, 2045.

The natural gas plant is being constructed next to Calpine's existing Freestone Energy Center in Freestone County and will connect into ERCOT's North Load Zone that includes Dallas-Fort Worth.

Under this agreement, performance standards must be met according to rules set out by TxEF’s In-ERCOT Generation Loan Program.

The TxEF operates through a competitive application process managed by the PUC with detailed financial review requirements.

In addition to these four approved loans, another thirteen applications are under review through due diligence processes at TxEF’s In-ERCOT Generation Loan Program. Combined, these proposals could bring an additional 7,211 megawatts of new dispatchable capacity online within ERCOT.

More information about TxEF programs can be found on the PUC website.