Latest news with #TexasEnergyFund
Reuters
26-06-2025
- Business
- Reuters
Governor announces first Texas Energy Fund loan for 122 MW natural gas facility
June 26 (Reuters) - Texas Governor Greg Abbott announced on Thursday that the first Texas Energy Fund (TEF) loan agreement will be used to fund a 122 megawatt (MW) natural gas power plant in Texas. "Under the loan agreement, subject to customary financial closing procedures, total project costs are not to exceed $175 million, with the PUC providing a 20-year TEF loan of up to $105 million at a 3% interest rate," said a press release on Abbott's official website. The governor's office added that the Kerrville Public Utility Board is the project's sponsor and will develop the facility, which is projected to begin operations by 2027. The facility will interconnect to the South Load Zone adjacent to Houston Load Zone, one of the largest electricity demand centers in the state.
Yahoo
10-06-2025
- Business
- Yahoo
Texas finalizes $1.8B to build solar, battery, and gas-powered microgrids
The Texas Legislature ended its biennial session without passing a slew of bills that could have killed the state's booming solar and battery sector, and by extension, the ability to keep the Texas grid running amid extreme weather and surging demand for electricity. It did pass a law that could strengthen the state's electricity reliability by encouraging the construction of more microgrids — combinations of small-scale gas-fired power, solar, and batteries that can be built quickly. Last week, Texas lawmakers authorized a long-awaited $1.8 billion fund to support microgrid deployment at hospitals, nursing homes, water treatment plants, police and fire stations, and other critical facilities across the state. The Texas Backup Power Package Program has awaited funding since 2023, when it was created as part of a broader legislative package. The goal is to help Texans protect themselves against extreme weather-driven grid emergencies like the disastrous blackouts during 2021's Winter Storm Uri, or the widespread power outages after 2024's Hurricane Beryl. Lawmakers failed to authorize the $1.8 billion in microgrid funding in 2023, however. Instead, the state pushed ahead with $5 billion for the Texas Energy Fund, which offers low-interest loans to developers of large-scale gas-fired power plants. That program has struggled. One project that applied for funding was found to be fraudulent. Others were denied loans. And many more projects have dropped out of contention, as developers deal with the same gas turbine shortages and rising costs that are dogging gas build-outs across the country. This year, lawmakers finally approved the microgrid funding, which is part of the remaining $5 billion in Texas Energy Fund spending officially authorized during the just-concluded session. That's a big deal, said Doug Lewin, president of Texas-based energy consultancy Stoic Energy and author of The Texas Energy and Power Newsletter. 'Now those funds will presumably begin to flow — and I think that puts us in the upper echelon of states for microgrid policy,' he said. Among the bills that failed this session in the face of opposition from environmental, business, and consumer groups were two — SB 388 and SB 715 — that would have forced new solar, wind, and battery projects to pay for a massive and equivalent amount of new capacity from fossil-gas power plants. The problem with such policies is not just the fallacy that building more planet-warming gas power plants guarantees a more reliable grid, industry experts say. It's also that companies simply can't build gas power plants fast enough to meet booming energy needs, not just in Texas, but across the country. Because those bills would have required gas to be built alongside renewables — and because gas power plant construction is seriously constrained — the legislation would have amounted to a block on many gigawatts' worth of new solar, wind, and battery developments in the state. 'I think one of the most important things that happened this session is this really broad-based business coalition communicating to anyone who would listen that these policies trying to restrict development of renewables aren't helpful,' Lewin said. Low-cost power from renewables and batteries 'is a big deal to manufacturers, to industrial customers, and to the oil and gas industry that's been working off diesel generators for decades and are now connecting to the grid,' he said. For years now, Lewin has been calling on state leaders to focus on helping customers save energy and keep power flowing during hurricanes, heat waves, and winter storms. He thinks microgrids are a good way to do that. When the broader grid is functioning well, facilities equipped with microgrids can use their solar, batteries, and generators to reduce their use of grid power. But when the grid goes down or experiences serious stress, those facilities can rely on those resources to continue running. Microgrids could also help meet ballooning power demand from homes, businesses, factories, and especially data centers chasing the AI boom that make up a massive share of future load growth forecasts, he said. The Electric Reliability Council of Texas, the grid operator for most of the state, forecast in April that peak electricity demand could more than double in the next five years. The number of data centers that end up getting built in Texas will ultimately determine how much new power the state actually needs. The microgrid program limits individual projects to no larger than 2.5 megawatts, Lewin said. That's far smaller than the hundreds of megawatts of capacity that can come from a single gas-fired power plant. But what microgrid projects lack in size they make up for in speed of construction, and many smaller-scale backup power projects will do more to meet demand than big power plants that take five or more years to build, he said. That's especially true if the microgrids are located at data centers themselves. To be clear, data centers aren't the target of the Texas Backup Power Package Program. Instead, the fund is set up to help sites that can't otherwise afford on-site backup power, explained Joel Yu, senior vice president of policy and external affairs at Enchanted Rock. The Houston-based microgrid operator runs 500 megawatts' worth of projects at grocery stores, truck stops, and other large power customers in Texas. Enchanted Rock has also deployed gas-fired generators at water utilities and irrigation districts, including Houston's Northeast Water Purification Plant. 'The $1.8 billion is a huge amount of money, and more ambitious than programs we've seen in other jurisdictions,' Yu said. 'But it's very much in line with state policy to improve resilience at critical facilities since Winter Storm Uri,' which knocked out power to more than 4.5 million people for up to a week in February 2021, leading to the deaths of an estimated 200 people and more than $100 billion in property damages. Enchanted Rock's existing customers tend to be larger entities that can secure financing and clearly quantify the financial value of backup power generation, Yu said. The $1.8 billion microgrid program 'unlocks opportunities for customers who aren't as sophisticated, and don't have the wherewithal to pay that extra cost,' he said. Assisted living facilities are particularly good candidates for state-funded microgrids, given how deadly power outages can be to older adults or medically compromised people. Alexa Schoeman, deputy of the state's long-term care ombudsman's office, told the Public Utility Commission of Texas in a March statement that the more than 80,000 residents of assisted living facilities in the state are at risk from extended power outages, and that 'operators have cited cost as the reason they are not able to install life-saving backup power at their locations.' Yu declined to name any customers that Enchanted Rock is working with to take advantage of the fund. 'But there's been a lot of interest from critical facilities that might want to make use of this. We've talked to folks in nursing homes, assisted living industries, and low-income housing, and other critical infrastructure, trying to get into the program.' Enchanted Rock has joined other backup generation providers including Bloom Energy, Base Power, Cummins, Generac, Mainspring Energy, and Power Secure in what Yu called an 'informal group of like-minded companies.' Dubbed Grid Resilience in Texas, or GRIT for short, the coalition is working with the Electric Reliability Council of Texas and the Public Utility Commission on the $1.8 billion microgrid program, he said. Most of these companies focus on gas-fueled power generation systems, whether those are reciprocating engines like those Enchanted Rock uses, linear generators from Mainspring, or fuel cells from Bloom Energy. Others specialize in battery backup systems, as with startup Base Power, or combine solar, batteries, and energy control systems with generators, as with Generac. The legislation creating the Texas Backup Power Package Program allows projects to tap up to $500 of state funding per kilowatt of generation capacity installed, and requires solar, batteries, and either fossil gas or propane-fueled generation, Yu said. But it 'isn't prescriptive about what proportions are in the mix,' he added. Different combinations could offer more favorable economics for different types of customers. Some may find that lots of solar panels are useful for lowering day-to-day utility bills, while others may want to maximize gas-fueled generation to cover multiday winter outages, when solar-charged batteries are less useful. The legislation creating the program does limit projects from actively playing in the grid operator's market programs, Yu added, meaning microgrid owners will face restrictions on selling the power they generate or the grid-balancing services they can provide to the market. Still, that 'does leave some room for customers to leverage the assets for behind-the-meter value,' such as using solar to offset utility power purchases, Yu said. 'That's going to be very important to making the economics work.'
Yahoo
14-02-2025
- Business
- Yahoo
Electric reliability improvements focus of new Texas Energy Fund program
Feb. 13—AUSTIN — The Public Utility Commission of Texas (PUCT) on Thursday approved a new rule establishing the Texas Energy Fund (TEF) Outside of ERCOT Grant Program (OEGP). The program will provide grants to Texas electric utilities and power generators outside of the Electric Reliability Council of Texas (ERCOT) region. Grants can finance modernization, weatherization, reliability and resiliency enhancements, and vegetation management. "Every corner of our state faces unique weather threats and challenges, and ensuring every Texas electric utility and power generator maintains a resilient system is essential to providing reliable, affordable power to all Texans," PUCT Chairman Thomas Gleeson said in a news release. "The rule approved today will ensure that the TEF improves electric reliability for all Texans, whether inside or outside the ERCOT region." The new rule, TAC 16 §25.512, implements provisions of Senate Bill 2627, passed by the 88th Texas Legislature and signed into law by Governor Greg Abbott in 2023. It establishes procedures for applying for a grant under the OEGP, and the eligibility requirements and terms of the grant awards. The ERCOT region encompasses about 75 percent of the geographic area of Texas. Some electric utilities that serve Texas consumers are not located within ERCOT. According to the rule, Texas electric utilities and power generators outside of the ERCOT region may apply for grants for the following types of projects: facility modernization, facility weatherization, reliability and resiliency, and vegetation management. Those categories are defined in detail in the rule. Qualifying entities may not apply for grants to pay debt or construct or upgrade a facility not located in Texas, among other restrictions. Specifics regarding the grant application procedure, review process, and grant award amounts are outlined in the rule. Requirements for monitoring and assessing the performance of projects funded by the grants will be outlined in each individual grant agreement. The Outside ERCOT Grant Program is one of four Texas Energy Fund (TEF) programs created under the Powering Texas Forward Act, which was established by the Texas Legislature through passage of Senate Bill 2627 in 2023. The rule establishing the Outside ERCOT Grant Program adopted today is the third TEF rule adopted by the Commission. The In-ERCOT Generation Loan Program rule and the Completion Bonus Grant Program rule were adopted on March 21 and April 25th, 2024, respectively. Additional information about the Texas Energy Fund is available on the PUCT website: Texas Energy Fund.
Yahoo
04-02-2025
- Business
- Yahoo
Sparks files third 89th priority legislative package on grid reliability
Feb. 4—AUSTIN — Senator Kevin Sparks (R-Midland) has announced his third legislative priority package, aimed at securing Texas' electric grid. As the Texas energy sector undergoes a major transformation, facing rising demand and a rapidly changing landscape, ensuring the grid's stability is more critical than ever. Senator Sparks' legislative package on grid reliability addresses population expansion, transmission planning, reliable generation, and correcting federal interference. Senator Sparks' 89th Legislative Priorities on 'Grid Reliability' consists of the following pieces of legislation: — SB 715: Consistent Reliability Requirements: Removes the bifurcated timeline structure regarding the reliability requirement, so the new standard will be followed by all grid participants. — SB 391: Permian Basin Transmission Planning: Updates the Electric Reliability Council of Texas' Permian Basin Reliability Plan for the region every five years. — SB 714: Market Distortion Solution: Eliminates or compensates for market distortion in electricity pricing caused by the benefits renewable energy receives from the federal subsidies. — SB 970: Texas Energy Fund Prioritization: Prioritizes cost-effective, reliable baseload generation for the Texas Energy Fund. "My legislative package focuses on securing the electric grid and ensuring the state keeps up with the growing generation demand and provides affordable, reliable, and responsible energy for every Texan," stated Senator Sparks. "I look forward to working on compensating for the influx of federal energy subsidies that have distorted the market and reforming the Texas Energy Fund to protect Texans from the soaring electricity costs caused by short-term fixes. Investing in dispatchable natural gas is a step toward improving energy efficiency, and we must leverage technology that serves the best interests of ratepayers." "We extend our heartfelt gratitude to Senator Kevin Sparks for his unwavering leadership and dedication to advancing Texas' energy infrastructure. Together, we are paving the way for a brighter, more resilient future." said Doug Robison, Founder and CEO — Natura Resources.
