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Abbott, Patrick seek to double funding for Texas Energy Fund to $10 billion

The fund provides taxpayer-backed 3% interest loans to companies that build natural gas power plants.

AUSTIN — Gov. Greg Abbott and Lt. Gov. Dan Patrick signaled support for doubling the budget of a government-backed loan program to build natural gas power plants.

Abbott and Patrick issued a joint statement indicating they would double the budget of the Texas Energy Fund to $10 billion after energy companies showed strong interest in the program, which would give 3% interest loans of taxpayer cash to the builders of natural gas power plants.

Their statement came after recent testimony from ERCOT CEO Pablo Vegas indicated that Texas’ power demand could nearly double in six years. Those projections have been fueled by an influx of power-hungry AI data centers and bitcoin miners as well as new industrial-scale users in West Texas oil fields.

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“If the new estimate is correct, the updated numbers provided by Mr. Vegas call for an immediate review of all policies concerning the grid,” the joint statement said.

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Vegas called for rapid development of electric transmission lines in April after ERCOT forecasted a 37% jump in power demand from previous estimates for power demand in 2030. The actual amount of new demand from those prospective projects likely will be below those projections.

Voters widely approved the Texas Energy Fund in November. The fund includes the low-interest loan program, government cash for the rapid construction of natural gas plants and backup power systems for critical infrastructure, such as hospitals and police stations.

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When lawmakers in 2023 approved the Texas Energy Fund, it was intended to be a $10 billion program. Initial funding was $5 billion with an understanding that the second half of cash would be added in 2025′s legislative session.

Abbott and Patrick said they would get the second $5 billion “as soon as possible” without elaborating on whether they would push lawmakers or seek taxpayer dollars elsewhere. Abbott and Patrick’s offices did not return an email seeking clarification.

“The average plant will take three to four years to complete, and new transmission lines will take three to six years to complete,” the joint statement said. “Texas is currently the fastest state to approve and build new plants and transmission lines because of our low regulations and pro-business policies, but we must move quickly.”

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About 70 energy companies — including Calpine, San Antonio’s municipal utility, NRG and Irving-based Vistra Corp. — filed notices of intent to participate in the program, outlining nearly 140 projects in proposals short on details. A large majority indicated they would create power plants known as natural gas peaker plants that could fire up quickly when demand and energy prices are high.

In total, companies filed notice to build $39 billion in new power plants that would add about 58,000 megawatts of power production to the power grid. About $1 billion of those projects were filed as wind and solar power projects, which are ineligible for the program. Industrial-scale battery projects also are not eligible.

Republican lawmakers have placed a premium on building new natural gas power plants as renewable energy’s profile on the Texas electric grid has grown. While renewable energy offers a cheap source of electricity and does not emit greenhouse gases, its availability can depend on weather conditions.

The Public Utility Commission, Texas’ power grid regulator, oversees the Texas Energy Fund. The agency is accepting applications for the loan program until July 27.