CPS Energy Launches Program to Change Texas Natural Gas

CPS Energy is teaming up with Seattle-based Modern Hydrogen on a pilot project that could reshape how San Antonio produces power. The project could also create new uses for Texas natural gas.

The city-owned utility will host a commercial-scale MH500 unit that the company says yields almost 500 kilograms of hydrogen per day. The Installation is slated for early 2026, and the site selection is still underway.

Jonathan Tijerina, CPS Energy’s vice president of corporate development, commented that “this can’t just be a one-and-done.” “The ability to be repeatable, the ability for its long-term sustainability from an emissions-reduction standpoint but also from an actual infrastructure investment – is it scalable?” he questioned. “Can this thing actually deliver and perform with multiple units, multiple locations, for a system like San Antonio that’s growing at the pace that we’re growing?”

The hydrogen could be used to generate electricity or blended into CPS’s natural gas supply, while the carbon byproduct will be turned into asphalt for Bexar County roads.

Modern Hydrogen has deployed similar “Modern Asphalt” in cities including Portland, Oregon, and Long Beach, California.

Modern Hydrogen will install and operate the unit, while CPS covers gas, electricity and site prep. The partnership could last at least six years, with four years dedicated to active operation. Both parties plan to seek state and federal incentives to offset costs.

Jim Wright, the chairman of the Railroad Commission of Texas, said the project demonstrates how “innovative technologies can unlock new value from the Eagle Ford and other prolific basins,” keeping energy “competitive, reliable, and local.”

Tijerina said the utility’s timeline factors in equipment testing, site acceptance, and potential supply chain delays. “What we are looking at right now is probably it becoming a live project in the next 18-36 months,” he expressed.

CPS is one of only a few U.S. utilities testing this technology, joining companies like Puget Sound Energy and NextEra Energy.

The effort, Tijerina said, aligns with “broader emission reduction diversification efforts” while leveraging the lone star state’s existing energy infrastructure.