(The Center Square) – Another natural gas facility is expanding in the Houston area and receiving property tax breaks resulting in less money going to public schools.
NRG Energy, Inc.’s construction of a new natural gas facility at its existing Cedar Bayou power production complex in Chambers County is doing so while also receiving 10 years of property tax breaks.
It’s receiving the tax breaks after being designated as a qualified project under the Texas Jobs, Energy, Technology, and Innovation (JETI) program. The program allows a company, school district, and the governor’s office to enter into an agreement “for a 10-year school district maintenance and operations (M&O) tax appraised value limitation of 50%, based on qualifying job and capital investment minimums. Projects located in qualified Opportunity Zones are eligible for an additional 25% limitation on taxable value.”
Gov. Greg Abbott said the JETI program was critical to the project’s expansion. “Offered in partnership with our local communities and school districts, it’s a critical tool to attract the significant business investments needed to ensure every Texas home and business has the power to thrive for decades to come,” Abbott said.
NRG EVP Robert Gaudette acknowledged the significance of the tax breaks, thanking the governor, legislature, Public Utility Commission and Goose Creek Consolidated Independent School District (Goose Creek CISD) “for being excellent partners in helping power Texas forward.”
The new Cedar Bayou power plant “will generate significant construction jobs and once online in 2028 will provide additional permanent jobs, new electricity for Texas, and regional economic growth,” he said in a statement. “With power demand surging across Texas, it takes public-private partnerships to meet that demand, and NRG is grateful that the Cedar Bayou project is part of Governor Abbott’s innovative JETI program.”
Chambers County Judge Jimmy Sylvia said he and county commissioners were pleased to give the multi-billion-dollar energy company tax breaks.
“The addition of NRG’s 721 MW power plant not only strengthens grid stability and reliability, it also enhances the county’s ability to retain and attract a broad cross section of industries,” he said in a statement. “The Commissioners Court was pleased to join with local governmental partners in incentivizing the project.”
Despite losing tax revenue in a district where a majority of students are economically disadvantaged, Goose Creek CISD Superintendent Dr. Randal O’Brien praised the project and supported the tax breaks.
“Goose Creek CISD’s collaboration with NRG on the innovative Cedar Bayou project supports a more sustainable energy future,” O’Brien said. “This initiative will strengthen grid resilience, drive hundreds of millions of dollars in economic growth across the greater Baytown area and help meet the evolving energy needs of our community and state.”
The majority of Goose Creek CISD students, 74%, are economically disadvantaged. The majority of the students are also Hispanic, 65%, and Black, 16%.
The district has an overall C grade rating by the Texas Education Agency. The ranking measures “how much students are learning in each grade and whether or not they are ready for the next grade. It also shows how well a school or district prepares their students for success after high school in college, the workforce, or the military,” TEA explains.
Roughly 40% of students are testing at their grade level in all subjects; only 13% are mastering their grade level, according to the data.
NRG is receiving property tax breaks after it entered into a Texas Energy Fund loan agreement with the PUC to build the new facility. It’s currently under construction and is estimated to begin generating 721 megawatts of power by summer 2028. It will serve Texas’s electric grid, the Electric Reliability Council of Texas (ERCOT), The Center Square reported.
According to the loan agreement, total project costs are an estimated $936 million. The PUC is providing a 20-year TEF loan of $562 million, or 60% of the total project cost, at a 3% interest rate. The loan term runs from Sept. 26, 2025, through Sept. 25, 2045. The facility must also meet minimum performance standards outlined in the loan program rules.
