Houston-based NRG Energy has opened its first new power plant in more than 10 years, a 456-megawatt natural gas facility funded in part by a $216 million loan from the state’s Texas Energy Fund.
The new plant, located at NRG’s TH Wharton Generating Station in northwest Harris County, can power more than 100,000 Texas homes during peak demand. It includes two natural gas generation units capable of starting up within 30 minutes, making them well-suited for meeting sudden spikes in electricity demand.
“If something happens and the day is a little bit stronger in terms of temperature, or a cold front comes in a little bit faster, these units get called on to be there for the grid,” Matthew Pistner, president of NRG Wholesale, told Houston Public Media.
The $10 billion Texas Energy Fund was established through state legislation and a voter-approved constitutional election in 2023 to improve power grid reliability. NRG has received more than $1 billion in loans through the fund, according to the Public Utility Commission of Texas. Most of the fund has been dedicated to building natural gas plants.
The project’s total cost was projected at less than $360 million, with the state loan covering approximately 60% at a 3% interest rate. Texas Gov. Greg Abbott praised the opening, saying it supports the state’s high-growth economy.
The plant arrives at a critical time for Texas. The state’s grid operator, ERCOT, is forecasting record-breaking energy demand driven by a massive influx of data centers and other large energy consumers. At least 248 data center projects are planned across the state, according to a Texas Tribune analysis.
“Will these plants run more with data centers coming on? I think time will tell,” Pistner said, acknowledging the growing demand from the AI infrastructure boom.
The facility is expected to operate approximately 1-2 hours per day on average, providing peaking capacity rather than baseload power. This operational profile reflects the plant’s role as a flexible resource that can ramp up quickly when demand spikes, particularly during hot summer afternoons when air conditioning loads strain the grid.
The Texas Energy Fund has proven instrumental in accelerating new power plant construction across the state. Other energy companies have also received loans from the fund, and additional natural gas facilities are in development. The fund’s focus on dispatchable generation reflects lessons learned from the 2021 Winter Storm Uri, which exposed vulnerabilities in Texas’s electric grid and prompted state lawmakers to act.
NRG plans to continue investing in new generation as Texas’s energy needs grow. The company is also exploring renewable energy and battery storage projects, though the immediate priority remains ensuring adequate dispatchable capacity to meet peak demand. With ERCOT projecting that Texas could face energy shortages within the next few years without new generation, the opening of this plant represents a timely addition to the state’s power infrastructure.
