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Texas Seeks to Double Taxpayer-Backed Fund for Natural Gas

Gov. Greg Abbott and Lt. Gov. Dan Patrick want $5 billion more to expand a low-interest loan program for natural gas power plant construction “as soon as possible.”

Texas Gov. Greg Abbott and Lt. Gov Dan Patrick will seek to expand a taxpayer-backed program that primarily funds low-interest loans to build natural gas power plants across the state to $10 billion from $5 billion "as soon as possible," they said Monday.

The move comes in response to new estimates from the Electric Reliability Council of Texas, the state's power grid operator, that the state could need 152 gigawatts of power in six years, roughly doubling the current record of 85.5 gigawatts. Though the projection has been public since April, there has been fresh concern among state leaders — including a sharp turn by some against the cryptocurrency industry — after ERCOT CEO Pablo Vegas spooked lawmakers in June with his testimony at legislative hearings regarding the grid.

"If the new estimate is correct, the updated numbers provided by Mr. Vegas call for an immediate review of all policies concerning the grid," Abbott and Patrick said in a joint statement.

Voters in November approved a $10 billion package known as the Texas Energy Fund, which is intended to incentivize building new sources of on-demand electricity generation, excluding battery storage, for the ERCOT grid, with $5 billion available in 2024 and 2025. Developers have submitted 125 notices of their intention to apply for $38.9 billion in financing for nearly 56 gigawatts of proposed generation, though not all may formally apply by the July 27 deadline. CPS Energy is among them, with two preapplications for funding to support two peaking power plants producing a combined 444 megawatts.

How much of the 152 gigawatts of projected demand will materialize is also uncertain, as some applications to connect to the ERCOT grid, such as from data centers, may be speculative. Critics of the Texas Energy Fund have said state leaders should focus on programs that reduce energy waste and incentivize energy conservation during times of peak demand, rather than gas plants that produce climate-warming emissions.

(c)2024 the San Antonio Express-News. Distributed by Tribune Content Agency, LLC.
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