(The Center Square) – NRG Energy Inc. is building another natural gas power plant in the Houston area, this time a 455 megawatt (MW) plant at its existing Greens Bayou Generating Station in Harris County.
It will interconnect with the Electric Reliability Council of Texas (ERCOT) Houston Load Zone, one of the largest electricity demand centers in Texas. This includes Houston, Pasadena and The Woodlands, which comprise the fifth largest metropolitan area in the U.S.
The plant is expected to begin generating power for the ERCOT power region in 2028.
“Texas leads the nation in energy production, providing nearly one-fourth of the country’s domestically produced energy,” Gov. Greg Abbott said. The new plant “will add more power to Texas’ energy infrastructure” and “ensure every Texas home has affordable, reliable power for decades to come.”
“Texas continues to experience unprecedented growth, and reliable power is essential to keep moving us forward,” NRG EVP Robert Gaudette said in a statement. “Our investment at Greens Bayou reflects NRG’s commitment to delivering dependable, dispatchable generation when Texans need it most. These units will strengthen grid resilience, create local jobs and support economic vitality. We appreciate Governor Abbott, the Legislature and the PUCT for their leadership in ensuring Texas remains powered for the future.”
The new plant is the sixth to be built through a new Texas Energy Fund (TxEF) loan agreement and the third TxEF agreement announced with NRG.
The first was signed with the Kerrville Public Utility Board to build a 122 MW natural gas power plant in Colorado County. The second and third were signed with NRG to build a 456-MW natural gas power plant in Houston and a 721 MW natural gas power plant at its Cedar Bayou Generating Station in Baytown, outside of Houston, The Center Square reported. The fourth was signed with Calpine Corporation to build a 460 MW natural gas power plant in Fairfield, south of Dallas.
The fifth was signed with Competitive Power Ventures to build the largest capacity project so far through the fund. It’s building a 1,350 MW natural gas generation facility at it Basin Ranch Energy Center in Ward County, The Center Square reported. Once connected, it’s expected to provide one of the largest sources of dispatchable generation capacity for the Texas grid.
After the six agreements were signed, the TxEF has now financed more than 3,500 MW of new, reliable additional power for the Texas grid.
The Public Utility Commission of Texas administers the TxEF, which provides low-interest loans for projects that add new, dispatchable power to the ERCOT region. It also oversees ERCOT, which manages the Texas grid.
In 2023, the Texas legislature created the TxEF loan program and allocated $5 billion to it. Voters overwhelmingly approved a constitutional amendment in a November 2023 election to support the fund, including supporting “the construction, maintenance, modernization, and operation of electric generating facilities.” This included authorizing grants and low-interest loans administered by the PUCT financed through the fund.
This year, the legislature appropriated $5 billion to fund the TxEF for fiscal years 2025-2026 and an additional $4 billion for fiscal years 2027-2028.
“Texans wisely recognized the need to prepare our grid for the future when they voted to create the TxEF in 2023, and the fund is delivering on that promise,” PUCT Chairman Thomas Gleeson said in a statement.
According to the PUCT-NRG loan agreement, total project costs are estimated to be less than $617 million. The PUCT is providing a 20-year TxEF loan up to $370 million, or 60% of the total project cost, at a 3% interest rate. The loan term runs from Nov. 20, 2025, through Nov. 20, 2045. The facility must also meet minimum performance standards outlined in the loan program rules.
There are currently 11 TxEF applications being considered in a due diligence review process, the PUCT said. Combined, they represent an additional 5,406 MW of proposed, new dispatchable generation for the ERCOT grid.
