First Texas Energy Fund Loan Goes to Kerrville Utility

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The Texas Public Utility Commission has finalized its first loan agreement under the state's low-interest energy fund, granting up to $105 million to the Kerrville Public Utility Board for the development of a 122-MW natural gas plant, known as the Rock Island Generation Project. This agreement, executed on June 25, is part of the Texas Energy Fund's In-ERCOT Generation Loan Program, which has a total allocation of $5 billion aimed at facilitating up to 10 GW of new gas-fired generation for the Electric Reliability Council of Texas (ERCOT).

The loan will be provided at a 3% interest rate over 20 years, with the total project costs capped at $175 million. The Kerrville PUB plans to cover the remaining costs through tax-exempt revenue bonds. Construction is set to begin in fall 2025, with operations expected to start by June 2027. The site, located nearly 200 miles from Kerrville, has access to four natural gas pipelines, enhancing its operational feasibility. Texas Governor Greg Abbott emphasized the project's importance in supporting the electricity demands of the state's largest load area.