Texas Energy Fund Approves $562 Million Loan for New Gas Power Plants Near Baytown

September 29th, 2025 By Casey Thornton

Governor Greg Abbott announced a $562 million low-interest loan via the Texas Energy Fund (TEF) to NRG Energy to build a 721-megawatt natural gas power plant near Baytown, scheduled to start generating power by summer 2028. This is the largest loan granted by TEF, marking a key investment in Texas’ energy future and grid reliability.

Texas Energy Fund Program: $7.2 Billion Initiative to Boost Power Generation in Texas

The TEF was established following the 2021 Winter Storm Uri blackouts, with $7.2 billion dedicated to funding new power plants—primarily natural gas facilities—to strengthen Texas electric capacity. This fund addresses growing electricity demand from population growth, data centers, and industries, targeting "shovel ready" projects and grid resilience.

Why New Gas-Fired Power Plants Are Vital for Texas Grid Reliability

Transmission lines stretch across the Texas landscape beside wind turbines and solar panels under a bright sky. This image illustrates the balance of renewable energy and traditional infrastructure supporting grid reliability.

Natural gas plants provide reliable, dispatch-able power, essential to supporting variable renewables such as wind and solar. Deploying gas plants via TEF loans allows Texas to meet peak electricity demand and reduce blackout risks during extreme weather. Experts emphasize the importance of balancing clean energy with dependable gas-fired generation for a resilient, affordable grid.

Economic and Environmental Implications of the Texas Energy Fund Loan

The loan supports economic growth and jobs in the Baytown area while raising important considerations about emissions linked to increased natural gas use. Policymakers must balance reliable, affordable energy with progress toward cleaner energy goals.

What Texas Electricity Consumers Should Know About the Texas Energy Fund Loan

Consumers can expect improved grid reliability and power supply but should stay informed about potential impacts on electricity rates and plan options. Understanding energy market changes and evaluating provider plans will be critical for making smart energy choices.

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