The new rules establish the “Texas Energy Fund Completion Bonus Grant Program” and create guidelines for generation developers seeking grants to construct new dispatchable power facilities or to expand existing ones.
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Find out more about ERCOT in this glossary and primer, created in 2022 by the Oncor Cities Steering Committee.
The Public Utility Commission has adopted additional rules needed to launch a new multi-billion-dollar generation subsidy program.
Adopted April 25, the new rules establish the “Texas Energy Fund Completion Bonus Grant Program” and create guidelines for generation developers seeking grants to construct new dispatchable power facilities or to expand existing ones. The new rules outline procedures for applying for completion bonus grants, detail the terms for annual grant payments, and describe performance requirements. The Completion Bonus Grant Program is just one component of the larger, multi-part Texas Energy Fund, established by the Texas Legislature and Texas voters in 2023.
“Today’s rule adoption is another important step to implement the Texas Energy Fund and incentivize the construction of high-quality, dispatchable power generation,” PUC chair Thomas Gleeson said shortly after the PUC action.
To be eligible for a completion bonus grant, a new or expanded facility must add at least 100 megawatts to the ERCOT grid and meet other requirements. The amount of a completion bonus grant will be based on the generation capacity added, interconnection date of the facility, and program funding availability. Award payments will be issued in ten yearly installments, and an eligible facility must continually meet minimum performance requirements to receive the ongoing payments.
ONE OF FOUR PROGRAMS
However, the program is just one of four created under the state’s “Powering Texas Forward Act,” established by the Texas Legislature through the passage of Senate Bill 2627 during the 88th regular session. A related rule — which the PUC adopted on March 21 — provides low-interest loans (as opposed to grants) for the construction of new dispatchable electric generating facilities located within the ERCOT power region or for the expansion of existing inside-ERCOT facilities. The PUC has announced a May 31 deadline for the submission of initial paperwork under that related program. As of May 1, paperwork from four potential applicants has been filed.
Two other programs under the Texas Energy Fund umbrella include one that will provide funding for companies that establish or secure back-up power resources, and another intended to improve the resiliency of electric utility service outside the ERCOT region.
In all, the TEF will have $5 billion available for all four programs. However, the Texas Legislature may provide more funding in future years.
MORE INFORMATION
Additional information about the Texas Energy Fund is available on the PUC website at https://www.puc.texas.gov/industry/electric/business/texas-energy-fund/.