NRG Energy has once again secured a major taxpayer-backed loan to construct a power plant near Baytown.
Gov. Greg Abbott announced Friday that NRG Energy will receive a $562 million low-interest loan through the Texas Energy Fund to build a new natural gas power plant near Baytown. The 721-megawatt facility is projected to generate enough electricity to power more than 180,000 homes during peak demand and is expected to come online in 2028. The loan carries a 3 percent interest rate and will be repaid over 20 years.
“Texas continues to grow as more people choose to raise their families and build their businesses in the energy capital of the world,” Abbott stated. “This 721 MW investment in the Texas grid will ensure the state continues to meet and provide for this incredible growth with a robust, reliable supply of energy to power Texas homes and businesses.”
The announcement follows another loan to NRG last month, when the company secured $216 million from the same fund to add 456 megawatts of capacity to existing plants in the region. NRG remains by far the largest beneficiary of the Texas Energy Fund, with the only other recipient to date being the Kerrville Public Utility Board, which received $105 million in June.
NRG has previously said it would not pursue several of these projects without the taxpayer-backed loans. The three proposals tied to the fund include the $216 million expansion, the $562 million Baytown plant, and a $147 million project for the Greens Bayou facility in Houston, which is still awaiting approval.
When asked about that project on Monday, NRG Executive Vice President Rob Gaudette admitted the company might not move forward without loan assistance. “Without loans, we definitely have to sharpen our pencils and think about it some more,” Gaudette said. “I’m not going to tell you that we wouldn’t build it, but I’m also not going to tell you that we would.”
The Texas Energy Fund was created in 2023 in response to the 2021 winter storm and set aside $7 billion for low-interest loans to expand the state’s power supply. In the two years since its creation, only three loans have been awarded, totaling $883 million.
Abbott’s office noted there are 14 more applications under review, representing a potential 7,671 megawatts of additional capacity for the Texas grid.
