NRG Energy has secured a multimillion-dollar state loan to construct two new natural gas units at an existing power plant in Houston.
The energy company announced Monday that it had entered a loan agreement with the Public Utility Commission of Texas to build two natural gas units designed to generate a total of 456 megawatts of power to the Houston area. According to the company, the two new units will be built at the TH Wharton Power Plant, located in Northwest Houston. The units, expected to begin operating next summer, will serve the Electric Reliability Council of Texas’ load zone for the Houston region.
NRG said in a news release the new units will help the region meet the growing power demands for artificial intelligence data centers and future residential developments.
“Demand for electricity across Texas is surging, and we’re working quickly to supply new dispatchable natural gas generation to the grid,” Robert J. Gaudette, NRG’s executive vice president and president of NRG Business and Wholesale Operations, said in a statement. “Our new units at TH Wharton will add lasting benefits to the surrounding community with the addition of jobs, enhanced grid stability, and economic growth.”
The grant is part of the Texas Energy Fund loan program via the Public Utility Commission of Texas.
NRG did not immediately respond to a request for comment regarding the monetary amount of the loan. Gov. Greg Abbott’s office said in a news release that the 20-year loan will provide up to $216 million, or 60% of the project’s total cost, at a 3% interest rate.
“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,” Public Utility Commission of Texas Chairman Thomas Gleeson said. “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.”
The loan term began July 31 and will end July 30, 2045, according to the governor’s office. As part of the loan agreement, the natural gas units will have to meet minimum performance standards.
The Texas Energy Fund program was passed during the state’s 2023 legislative session as Senate Bill 2627, following the deadly winter storm of 2021 that killed more than 210 Texans, including more than 40 in Harris County.
According to The Texas Tribune, SB 2627 represented a movement by the state legislature away from renewable energy and toward natural gas-fueled electricity. After the 2021 winter storm, renewable energy was repeatedly blamed for the failure despite the extreme cold impacting all of the state’s energy sources.
The loan to NRG represents one of two loan agreements approved under the Texas Energy Fund, totaling a projected 578 megawatts of additional power, according to the governor’s office.
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