Houston, November 21, 2025
Governor Greg Abbott has revealed a significant $370 million loan from the Texas Energy Fund to NRG Energy Inc. for a new natural gas power plant in Houston. This 455-megawatt facility, aimed at enhancing the Electric Reliability Council of Texas (ERCOT) grid, is scheduled to commence operations in 2028. The investment promises to bolster Texas’s energy infrastructure, strengthen grid resilience, and create local jobs, aligning with Texas’s strategy to meet increasing energy demands.
Houston, Texas – Governor Abbott Announces $370 Million Loan for New Natural Gas Power Plant
Governor Greg Abbott has announced a $370 million loan from the Texas Energy Fund (TxEF) to NRG Energy Inc. for the construction of a 455-megawatt natural gas power plant in Houston. The facility is expected to begin operations in 2028, contributing to the Electric Reliability Council of Texas (ERCOT) power region.
Details of the Loan Agreement
The loan agreement, finalized on November 20, 2025, is the sixth under the TxEF’s In-ERCOT Generation Loan Program. This program provides low-interest loans to projects that add new, dispatchable power to the ERCOT grid. The total project cost is estimated to be less than $617 million, with the TxEF providing a 20-year loan covering up to 60% of the total cost at a 3% interest rate. The loan term runs from November 20, 2025, through November 20, 2045. NRG will build the facility at its existing Greens Bayou Generating Station in Harris County, interconnecting it to the ERCOT Houston Load Zone, which includes Houston, Pasadena, and The Woodlands. This region represents the fifth-largest metropolitan area in the United States.
Impact on Texas Energy Infrastructure
This investment is part of Texas’s broader strategy to enhance its energy infrastructure. The TxEF has secured over 3,500 megawatts of new, reliable, and affordable power for the state. The Public Utility Commission of Texas (PUCT) Chairman emphasized the importance of such investments in preparing the state’s power supply to meet future demands. Additionally, NRG’s executive team highlighted the project’s role in strengthening grid resilience, creating local jobs, and supporting economic vitality in the region.
Background on the Texas Energy Fund
Established through Senate Bill 2627 in June 2023, the TxEF is an initiative by the Texas Legislature designed to offer low-interest rate loans to electric generation facilities and power plants within the ERCOT grid. The fund aims to support the establishment, maintenance, enhancement, and operation of electric generation facilities and auxiliary power sources in Texas. Eligible entities include power generation companies, municipally owned utilities, electric cooperatives, and river authorities. The program is part of a broader $10 billion funding approved by voters in November 2023, with up to $7.2 billion allocated for both loans and grants for dispatchable power generation facilities within the ERCOT grid. The objective is to add approximately 10 gigawatts of gas-fired generation to the grid, enhancing reliability and meeting the state’s growing energy demands.
Previous Investments in Texas Energy Infrastructure
Prior to this announcement, the TxEF had approved several significant investments to bolster Texas’s energy infrastructure. Notably, on October 30, 2025, a $370 million loan was announced for a 1,350-megawatt natural gas power plant in Ward County, expected to begin generating power in 2029. Additionally, on October 14, 2025, a $216 million loan was approved for a 460-megawatt natural gas facility in Fairfield, Texas, slated to begin operations before summer 2026. These projects, along with the latest Greens Bayou facility, are part of a concerted effort to ensure reliable and affordable power for Texas residents and businesses.
Conclusion
The latest loan agreement underscores Texas’s commitment to strengthening its energy infrastructure through strategic investments in reliable, dispatchable power generation. By supporting projects like the Greens Bayou facility, the state aims to meet the growing energy demands of its residents and businesses, ensuring a robust and resilient power grid for the future.
Frequently Asked Questions (FAQ)
What is the Texas Energy Fund (TxEF)?
The TxEF is an initiative by the Texas Legislature designed to offer low-interest rate loans to electric generation facilities and power plants within the Electric Reliability Council of Texas (ERCOT) grid. The fund aims to support the establishment, maintenance, enhancement, and operation of electric generation facilities and auxiliary power sources in Texas.
Who is eligible for loans from the TxEF?
Eligible entities include power generation companies, municipally owned utilities, electric cooperatives, and river authorities. The program is part of a broader $10 billion funding approved by voters in November 2023, with up to $7.2 billion allocated for both loans and grants for dispatchable power generation facilities within the ERCOT grid.
What is the purpose of the TxEF’s In-ERCOT Generation Loan Program?
The In-ERCOT Generation Loan Program provides low-interest loans to projects that add new, dispatchable power to the ERCOT grid. The objective is to add approximately 10 gigawatts of gas-fired generation to the grid, enhancing reliability and meeting the state’s growing energy demands.
What is the Greens Bayou Generating Station project?
The Greens Bayou Generating Station project involves the construction of a 455-megawatt natural gas power plant at NRG Energy’s existing Greens Bayou Generating Station in Harris County, Texas. The facility is expected to begin operations in 2028, contributing to the ERCOT power region and enhancing the state’s energy infrastructure.
How does the Greens Bayou project impact the Houston area?
The project will interconnect to the ERCOT Houston Load Zone, which includes Houston, Pasadena, and The Woodlands. This area comprises the fifth-largest metropolitan area in the United States. The facility is expected to strengthen grid resilience, create local jobs, and support economic vitality in the region.
| Feature | Details |
|---|---|
| Project Name | Greens Bayou Generating Station Expansion |
| Location | Harris County, Texas |
| Capacity | 455 megawatts |
| Expected Operational Date | 2028 |
| Interconnection | ERCOT Houston Load Zone |
| Project Cost | Estimated to be less than $617 million |
| Loan Details | 20-year loan covering up to 60% of total cost at a 3% interest rate |
| Project Developer | NRG Energy Inc. |
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Author: STAFF HERE HOUSTON TX WRITER
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