Governor Greg Abbott announced the first Texas Energy Fund (TEF) loan agreement to support a 122 megawatt natural gas power plant in Texas. This initiative, executed by the Public Utility Commission of Texas (PUC), will bolster power generation near one of the largest electricity demand centers in the Electric Reliability Council of Texas (ERCOT) region.
“As Texas continues to rapidly grow, we must further fortify the state power grid,” stated Governor Abbott. He emphasized that this investment would ensure affordable and reliable power for Texans and help manage the state’s largest electricity demand area.
PUC Chairman Thomas Gleeson highlighted the achievement: “The goal of the Texas Energy Fund has always been clear: secure reliable, affordable power that will serve the state for decades to come.” He noted that this new facility would enhance electric reliability and support economic growth in Texas.
Mike Wittler, General Manager & CEO of Kerrville Public Utility Board (KPUB), described it as a historic milestone. “With this funding secured—and thanks to the rigorous due diligence of the TEF team—we’re proudly powering forward with a long-term strategic initiative,” he said.
KPUB sponsors and will develop the Rock Island Generation Project, which is expected to begin operations by June 1, 2027. The project marks the first finalized loan under TEF’s In-ERCOT Generation Loan Program, offering low-interest loans for projects adding new dispatchable power to ERCOT.
The loan agreement outlines total project costs not exceeding $175 million, with PUC providing up to $105 million over 20 years at a 3% interest rate. Located in Colorado County near Columbus, it will connect to South Texas Electric Cooperative’s Rock Island substation in ERCOT’s South Load Zone.
The facility must adhere to minimum performance standards per program rules. Besides this agreement, there are currently 18 active applications under review within TEF’s program, proposing an additional 9,102 MW for ERCOT’s grid.
Further details on TEF and its programs can be found on PUC’s website.
