(The Center Square) – Another natural gas power plant is being built in Texas, this time in the Permian Basin in west Texas. It’s the largest capacity project to date through a Texas Energy Fund program.
Competitive Power Ventures is building a 1,350 megawatt (MW) natural gas generation facility at CPV’s Basin Ranch Energy Center in Ward County, west of Odessa. It’s expected to begin generating power in 2029 and will interconnect in the Electric Reliability Council of Texas (ERCOT) West Load Zone.
By generating 1,350 MW, the facility will produce the largest capacity of energy of any project financed by the TxEF to date. Once connected, it will also provide one of the largest sources of dispatchable generation capacity for the Texas grid.
“The Texas Energy Fund secured the largest capacity project to date, with 1,350 MW of new, reliable power generation coming online that will further fortify our state grid and support our growing economy for decades,” Gov. Greg Abbott said. “As one of the largest sources of dispatchable power generation for the grid, this investment is just the latest example of why Texas is the energy capital of the world. We will take every step necessary to ensure affordability and electric reliability for Texas homes and businesses across our great state.”
CPV CEO Sherman Knight thanked the governor and state and local leaders “for their continued support of the CPV Basin Ranch Energy Center that will provide critical baseload power to the citizens of Texas.” Thanks to incentives like the TxEF and available natural resources in the Permian Basin, “Texas is paving the way for new investments and development across the state; CPV looks forward to playing a role in that future,” he said.
The project will “be capable of powering the equivalent of 850,000 homes using locally sourced natural gas, and freeing much-needed pipeline capacity,” CPV said. CPV Basin Ranch is being developed with the option to include carbon capture capabilities, designed to “capture ~95% of the emitted carbon dioxide, which could be used for enhanced oil recovery in the Permian Basin,” it says.
The project is expected to add $410 million in net benefits to local taxing districts, create 5,200 direct, indirect, and induced jobs during construction (3-4 years), paying over $1.8 billion in wages and benefits, CPV says.
It’s also expected to add more than 90 direct and indirect jobs during operations paying over $1.3 billion in wages and benefits, it says. The facility is also being built to meet or exceed EPA carbon emission standards, reduce flaring and reduce water use through innovative design paired with air cooling, it says.
CPV has signed the fifth Texas Energy Fund loan agreement announced this year.
The first was signed with the Kerrville Public Utility Board to build a 122 MW natural gas power plant in Colorado County. The second and third were signed with NRG Energy, Inc. to build a 456-MW natural gas power plant in Houston and a 721 MW natural gas power plant at its Cedar Bayou Generating Station in Baytown, outside of Houston, The Center Square reported. The fourth was signed with Calpine Corporation to build a 460 MW natural gas power plant in Fairfield, south of Dallas.
After these agreements were signed, the TxEF has now financed more than 3,100 MW of new, reliable additional power for the Texas grid.
“There is important work still ahead, but this newest commitment to invest in Texas is a clear demonstration of the value and reliability benefits the TxEF is bringing to bear,” Public Utility Commission of Texas Chairman Thomas Gleeson said.
The PUC administers the TxEF, which provides low-interest loans for projects that add new, dispatchable power to the ERCOT region. It also oversees ERCOT, which manages the Texas grid.
In 2023, the Texas legislature created the Texas Energy Fund Loan Program and allocated $5 billion to it. Voters overwhelmingly approved a constitutional amendment in a November 2023 election to support the fund, including supporting “the construction, maintenance, modernization, and operation of electric generating facilities.” This included authorizing grants and low-interest loans administered by the PUC financed through the fund.
This year, the legislature appropriated $5 billion to fund the TEF for fiscal years 2025-2026 and an additional $4 billion for fiscal years 2027-2028.
According to the PUC-CPV loan agreement, total project costs are estimated to be $1.88 billion. The PUC is providing a 20-year TxEF loan of $1.12 billion, or 60% of the total project cost, at a 3% interest rate. The loan term runs from Oct. 28, 2025, through Oct. 28, 2045. The facility must also meet minimum performance standards outlined in the loan program rules.
There are currently 12 TxEF applications being considered in a due diligence review process, the PUC said. Combined, they represent an additional 5,861 MW of proposed, new dispatchable generation for the ERCOT grid.