First natural gas power plant to be built using First Texas Energy Fund loan

AI generated summary

Governor Greg Abbott announced the first finalized loan agreement from the Texas Energy Fund (TEF) for a new natural gas power plant being developed by the Kerrville Public Utility Board (KPUB) in Colorado County, Texas. The TEF, created by the Texas legislature in 2023 with a $5 billion allocation, aims to provide low-interest loans for projects that enhance power generation in the Electric Reliability Council of Texas (ERCOT) region. The KPUB project, which will generate 122 megawatts of power, is expected to be operational by June 1, 2027, and will leverage existing infrastructure to ensure reliable energy supply.

The facility will connect to the South Texas Electric Cooperative Rock Island substation, serving one of the largest electricity demand areas in Texas. With the TEF investment, Abbott emphasized the importance of ensuring affordable and reliable power for Texans. The project is part of KPUB's long-term strategy to manage its power supply portfolio and shield ratepayers from market volatility. The loan agreement includes a 20-year TEF loan of up to $105 million at a 3% interest rate, with additional applications for the TEF program currently under review, representing a potential increase of over 9,100 MW of new dispatchable generation for the ERCOT grid.