First Texas Energy Fund-backed Generation Project Comes Online

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Written by Paul Wiseman for IIR News Intelligence (Sugar Land, Texas)

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Summary

Constellation Pin Oak peaking power is the first of six Texas Energy Fund-backed power projects to come online. Project reports for all six projects, which will total 3.47 GW of power capacity, can be found in the Industrial Info Resources Global Market Intelligence (GMI) Power Project Database.

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Texas Energy Fund

According to Industrial Info Resources data, the six so-far-approved Texas Energy Fund (TxEF) projects will total 3.47 GW of power capacity.

May 5 saw the opening of the first power generation project supported by a TxEF loan, the 460-megawatt (MW) Constellation Pin Oak peaking power plant in Freestone County in central Texas. Readers can consult a detailed project report, plant profile and find information on the two generating units from the Industrial Info Resources Global Market Intelligence (GMI) Power Project, Plant and Unit databases.

The plant, designed to provide dispatchable power during periods of peak demand, interconnects with Energy Reliability Council of Texas' (ERCOT) North Load Zone, which includes the Dallas-Fort Worth metroplex.

Total TxEF loans for the six projects agreed to so far will be $2.61 billion out of a total cost of $4.37 billion.

The Constellation Pin Oak project was announced by both Calpine, the operator, and the Texas Governor's Office on October 14, 2025.

The $278 million loan--60% of the project's total cost of $464 million--was the fourth finalized under the TxEF's In-ERCOT Generation Loan Program.

The Freestone Energy Center, at which the expansion is located, is a natural gas-fired combined-cycle facility located on approximately 506 acres near Fairfield. Before the expansion, it consisted of four combustion turbines, four heat recovery steam generators and two steam turbine generators.

What Is the Texas Energy Fund?

Founded by the 2023 Texas Legislature after 2021's Winter Storm Uri-related collapse of the ERCOT-managed grid, the TxEF provides grants and loans to finance the construction, maintenance, modernization, and operation of electric facilities in Texas. The format is to provide 20-year loans at 3% interest.

The Texas Legislature updated its structure in 2025 because some requirements had expired without being utilized.

For more on how ERCOT is improving its storm readiness, see April 24, 2026, article, ERCOT's AI Planning Reduces Texas' Storm-Related Grid Outages.

Constellation Pin Oak is the first of six approved TxEF projects to be completed.

Next Up, NRG Energy's TH Wharton

What will be the second TxEF-backed project to be finished, slated for later this month, is NRG Energy's 415 MW of simple-cycle gas generation being added to its TH Wharton power plant in Houston. View the related project report and plant profile. Company executives announced this in a first-quarter earnings call on May 7.

TxEF in 2025 executed a $216 million loan covering 60% of the project, the second to be issued by the fund, and the first of three projects planned by NRG. According to Industrial Info Resources data, total project costs will be $300 million.

NRG's Other Two TxEF Projects

The second NRG project and the third issued by the fund is a 695-MW natural gas-powered generation plant at NRG's existing Cedar Bayou Generating Station in Chambers County, near Baytown. The GMI database offers a related project report and plant profile.

The addition is expected to begin operation in the summer of 2028, serving ERCOT's Houston Load Zone, which is among the state's largest power demand centers. In addition to Houston, it includes Pasadena, Sugar Land, and the Woodlands. According to Industrial Info Resources data, cost projections are $936 million, with the TxEF loan covering $526 million, or 60% of the total.

NRG's third TxEF addition, awarded in November of 2025, will be a 455-MW natural gas-powered plant at the company's existing Greens Bayou Generating Station in Harris County. View the related project report and plant profile. It also will connect with the Houston Load Zone.

For this addition, according to Industrial Info Resources data, the cost will be $616 million. The TxEF loan will be for 60%, $370 million.

Kerrville Site of First TxEF Agreement

The first loan agreement, for the Rock Island Generation project, came about on June 26, 2025, expected to supply 122 MW of gas-fired generation power to the Kerrville Public Utility Board (KPUB).

According to Industrial Info Resources data, costs will be $175 million, with a TxEF loan providing up to $105 million. The facility will be located in Colorado County, approximately 10 miles south of Columbus. Sky Global will build and operate the plant at the site of an existing plant it also built and operates.

The plant will interconnect to the South Texas Electric Cooperative Rock Island substation in the ERCOT South Load Zone.

KPUB's website reports that the purpose in owning this plant is to move away from buying power from other providers. Owning their generation will allow them to better control costs and pricing.

Project Number Six

The most recent TxEF loan project came on October 30, 2025. It is for a 1,320-MW natural gas power plant in Ward County. Competitive Power Ventures (CPV) Basin Ranch will build the plant, expected to begin generating power in 2029. View the project report and plant profile.

Its size makes it "the largest capacity of any project financed by the TxEF to date," according to the Texas government's website. It will interconnect in the ERCOT West Load Zone.

The project's dollars are also large. The total is $1.88 billion, with the TxEF's 60% loan amounting to $1.12 billion.

By the Numbers

• 3,467 MW: Total capacity of the six so-far-approved Texas Energy Fund loan power projects
• $4.37 billion: Total investment value of the six projects
• $2.61 billion: Total value of TxEF loans

Key Takeaways

• The grid debacle of Winter Storm Uri in 2021 pushed ERCOT to double down on the reliability and look for ways to strengthen the grid.
• Offering low interest, long term loans through the Texas Energy Fund is one way Constellation Pin Oak is the first of the six projects allocated to come online.
• Others are scheduled for a span including later this month through 2029.

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About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).