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The Texas Energy Fund

 

The Public Utility Commission of Texas was directed by the Texas Legislature through Senate Bill 2627, the Powering Texas Forward Act, to administer Texas Energy Fund (TEF) programs. The TEF will provide grants and loans to finance the construction, maintenance, modernization, and operation of electric facilities in Texas. Texans voted to create the TEF on November 7, 2023.

 

Texas Energy Fund Programs

The TEF will provide funding opportunities for electric generation projects -- both in and outside of the Electric Reliability Council of Texas (ERCOT) Power Region -- based upon an application process and award system to be developed and implemented the by the Public Utility Commission of Texas. In addition, the TEF legislation includes provisions to prioritize interconnection for TEF-funded electric generation facilities.

TEF project # 54999

 

 

Inside the ERCOT Power Region

Loans

Entities may apply for a loan to finance upgrades to existing dispatchable electric generating facilities providing power to the ERCOT region or to finance the construction of new electric generating facilities within the ERCOT region. To qualify, a project must result in a net increase of at least 100 megawatts of generation capacity for a single facility. Loans for new construction are only available for facilities added to ERCOT's Capacity, Demand, and Reserves (CDR) Report after June 1, 2023.

Completion Bonus Grants

New dispatchable electric generation facilities that were planned after June 1, 2023 and interconnect to ERCOT before June 1, 2029, are eligible for a completion bonus grant. Facilities must have a generation capacity of at least 100 megawatts to be eligible.

  Loans Completion Bonus Grants
Includes New construction of at least 100 MW of dispatchable generation since the June 1, 2023 CDR.

Upgrades resulting in at least 100 MW of additional dispatchable generation since the June 1, 2023 CDR.
New construction of at least 100 MW of dispatchable generation since the June 1, 2023 CDR.
Excludes
  • Storage
  • Industrial or private use network generation
  • Natural gas pipelines
  • Electric utility other than a river authority
  • Storage
  • Industrial or private use network generation
  • Natural gas pipelines
Caps
  • Combined cap of 10,000 MW and $7.2 billion for both programs together.
  • Loan amounts cannot exceed 60% of estimated project cost for facility to be constructed.
Terms Loan to be repaid over 20 years beginning on the third anniversary of the estimated commercial operations date of the facility for which the loan was provided.

Deadline to distribute initial funds is December 1, 2025.
Grant to be paid in equal annual installments over 10 years, beginning on the first anniversary of the commercial operations date of the facility.

 

Outside the ERCOT Power Region

Grants

Entities may apply for a grant to be used for transmission and distribution infrastructure or electric generating facilities in Texas outside the ERCOT Power Region. The Public Utility Commission of Texas will award the grants.

Includes The following activities related to transmission and distribution infrastructure and generation facilities:
  • Modernization
  • Weatherization
  • Reliability and resiliency enhancements
  • Vegetation management
Excludes
  • Compliance with weatherization standards in place as of December 1, 2023
  • Debt repayment
  • Industrial or private use network generation
  • Natural gas pipelines
Caps Total awards cannot be more than $1 billion.
Terms To be established in grant agreements between the PUC and grant recipients.

 

Texas Backup Power Packages

A backup power package is a stand-alone, behind-the-meter, multiday backup power source. A facility on which a community relies for health, safety, and well-being can apply for a grant or loan to install a backup power package. This program can support backup power packages in any part of Texas. The Texas Backup Power Package Advisory Committee will support the Commission in developing the criteria for these grants and loans.

Includes Design, procurement, installation, and use of back-up power packages for facilities communities rely upon for health, safety and well-being.
Excludes A commercial energy system, a private school, or for-profit entity that does not directly serve public safety and human health.

Source of back-up power that does not follow the design and use standards of a Texas Back-up Power Package.
Caps
  • Individual grants are capped at $500/KW of capacity
  • Cap of $1.8 billion total for grants and loans combined
Terms To be established in the loan and grant agreements between the PUC and program participants.