Governor Greg Abbott (R) announced a Texas Energy Fund loan agreement providing up to $411 million to help finance a new 570-megawatt natural gas power plant in Sherman that is expected to begin serving the ERCTO grid in 2028.
What happened?
Gov. Greg Abbott announced the seventh finalized loan agreement under the Texas Energy Fund (TxEF), supporting the construction of a new natural gas-fired power plant in Sherman, Texas. The project will be developed by Rayburn Electric Cooperative and is expected to add 570 megawatts of dispatchable power generation to the Electric Reliability Council of Texas (ERCOT) region.
The facility, known as Rayburn Energy Station II, will be built near the cooperative's existing power plant and will interconnect within the ERCOT North Load Zone.
The Public Utility Commission of Texas (PUCT) approved a loan of up to $411 million through the TxEF's In-ERCOT Generation Loan Program.
Key funding details:
- Total project cost is estimated at less than $685 million.
- The Texas Energy Fund will provide a loan of up to $411 million.
- The loan covers 60% of project costs.
- The interest rate is set at 3%.
- The loan term runs from June 3, 2026, through June 3, 2046.
What officials are saying
Gov. Abbott: "Texas is the energy capital of the world because we invest the power needed to support the growth of our state. The Texas Energy Fund brings new, reliable generation online to ensure our power supply meets demand."
PUCT Chairman Thomas Gleeson: "When Texas voters overwhelmingly approved the Texas Energy Fund, they gave us a mandate to secure new, reliable power for Texas. The TxEF is delivering on that promise, and Rayburn Electric Cooperative's new 570 MW power plant is proof."
Rayburn Electric Cooperative President and CEO David A. Naylor: "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."
The Bottom Line
The approval of Rayburn Electric Cooperative's Sherman power plant marks another major investment in Texas's electric grid, with state officials positioning the project as part of a broader effort to increase reliability and meet future energy demand across ERCOT.
