NRG Secures State Loan for Texas Power Plant Addition

Written by Jesse Broehl for Industrial Info Resources (Sugar Land, Texas)--NRG Energy (Houston, Texas) in early August secured a rate-subsidized loan from the state of Texas via the state's Texas Energy Fund (TEF) Loan Program. NRG Energy will add 456 megawatts (MW) of new natural gas-fired generation capacity at its existing TH Wharton Generating Station in Houston. The plant currently operates 1,189.9 MW of capacity and was originally commissioned in 1958.

The additional uprate of capacity at the site is sorely needed in the region since the Houston area is one of the largest and fasting growing electricity demand areas in the U.S. The project is already under construction and is currently slated to begin operations by summer 2026.

The plans include installing at the existing site two 228-MW Siemens SGT6 5000F simple-cycle combustion turbine generators, plus balance-of-plant equipment.

TEF Loan Agreement Details
The loan agreement between the Public Utility Commission of Texas (PUCT) and NRG is the second one finalized under the TEF's In-ERCOT Generation Loan Program, which provides low-interest loans for projects that add new, dispatchable power to the ERCOT region.

The PUCT is providing a 20-year TEF loan up to $216 million, or 60% of total cost, at a 3% interest rate. The loan term runs from July 31, 2025, through July 30, 2045.

Industrial Info is tracking the total spend at around $300 million. The project estimate from the PUCT is around $360 million, which may include import tariffs and other particulars.

TEF Off to a Slow Start but New Dispatchable Power in High Demand
While well-intentioned, and new capacity is sorely needed, the TEF has been slow to award contracts since costs for power plants and development has been challenging.

In addition to the two loan agreements already approved, which together represent 578 MW, there are currently 15 applications to the TEF In-ERCOT Generation Loan Program that are active and moving through a due diligence review process.

Together, they represent an additional 8.392 GW of proposed, new dispatchable generation for the ERCOT grid.

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