Texas Border Business
AUSTIN – Governor Greg Abbott announced the seventh Texas Energy Fund (TxEF) loan agreement for a 570 megawatt (MW) natural gas power plant in Sherman, Texas. Rayburn Electric Cooperative will build the plant, which is expected to begin generating power for the Electric Reliability Council of Texas (ERCOT) power region in 2028.
“Texas is the energy capital of the world because we invest in the power needed to support the growth of our state,” said Governor Abbott. “The Texas Energy Fund brings new, reliable generation online to ensure our power supply meets demand. This project is another step toward keeping our grid strong and our economy the envy of the world.”
“When Texas voters overwhelmingly approved the Texas Energy Fund, they gave us a mandate to secure new, reliable power generation for Texas,” said PUCT Chairman Thomas Gleeson. “The TxEF is delivering on that promise, and Rayburn Electric Cooperative’s new 570 MW power plant is proof. We are ensuring Texas families and businesses have power they can depend on for years to come.”
“Rayburn Energy Station II represents a major milestone and strategic investment in reliability for our four Member cooperatives and the communities we serve across North Texas,” said President and CEO of Rayburn David A. Naylor. “As our region continues to grow, investments in safe, reliable, and affordable power remain critical. We are thankful to Governor Abbott, our legislators, and the PUCT for their continued leadership and focus on strengthening the ERCOT grid. We take great pride in being the first cooperative to qualify for and achieve funding under the Texas Energy Fund.”
The loan agreement between the PUCT and Rayburn Electric Cooperative is the seventh finalized under the TxEF’s In-ERCOT Generation Loan Program, which provides low-interest loans for projects that add new, dispatchable power to the ERCOT region. Under the loan agreement, total project costs are estimated to be less than $685 million. The PUCT is providing a 20-year TxEF loan up to $411 million, or 60% of total cost, at a 3% interest rate. The loan term runs from June 3, 2026, through June 3, 2046.
Rayburn Electric Cooperative will build the facility near its existing Rayburn Energy Station 1 facility in Sherman. The project will interconnect in the ERCOT North Load Zone.
Under the loan agreement, the facility must meet minimum performance standards, as outlined in program rules. The TxEF is administered by the PUCT through a competitive application process and rigorous financial review of proposed projects.
In addition to the seven loan agreements already approved, there are currently six applications to the TxEF In-ERCOT Generation Loan Program moving through a due diligence review process. Together, they represent an additional 3,216 MW of proposed, new dispatchable generation for the ERCOT grid.
Additional information about the TxEF and the In-ERCOT Generation Loan Program is available on the PUCT website.
