State Rep. Brooks Landgraf and the Texas Independent Producers & Royalty Owners Association say the newly established Texas Energy Fund is paying off with three natural gas-fired electrical generation plants in the Permian Basin.
“Texas’ abundant natural gas resources are essential to ensuring a reliable and affordable power supply for all Texans,” said Landgraf, an Odessa Republican who represents Ward, Winkler, Loving and Ector counties in the 81st District in Austin. “As an energy production leader our state and especially the Permian Basin must rely on these resources to meet growing energy demands.
“Guaranteeing this reliability is one of our most important responsibilities as policymakers,” he said. “That is why during the most recent legislative session in 2023 I fought to pass key legislation to incentivize the construction of new dispatchable natural gas generation facilities including the establishment of the Texas Energy Fund.”
Landgraf said it is therefore gratifying to see the early success of the fund, marking a significant step in supporting the development of reliable, dispatchable power projects like those advancing in Ward, Reeves and Ector counties. The seat of Reeves County is Pecos.
“I will continue working to increase generation capacity in Texas, especially here in the Permian Basin, where it makes so much sense,” he said. “By prioritizing natural gas energy we are strengthening our grid’s resilience during extreme weather and keeping electricity affordable and reliable for all Texans.”
TIPRO President Ed Longanecker said the Public Utilities Commission of Texas has boiled down 72 loan applications to the TEF to 17 gas-fired dispatchable electrical generation projects including those in the Basin.
“Altogether the 17 projects would require $5.38 billion in loans and generate 9,781 megawatts of electricity,” Longanecker said from Austin. “During the 88th Legislative Session in Austin TIPRO supported the passage of legislation including Senate Bill 2627 and Senate Joint Resolution 93, the Powering Texas Forward Act, which established the Texas Energy Fund to be used by the Public Utility Commission of Texas to provide loans to finance new dispatchable electric generating facilities as well as upgrades to existing facilities.”
He said this program allows the PUCT to provide completion bonus grants for the construction of dispatchable electric generating facilities in the Electric Reliability Council of Texas power region and zero interest loans for new generation builds up to 10 gigawatts as well as for additions to existing generation facilities.
“Meanwhile House Bill 5066 was another priority supported by TIPRO last year, related to electricity service in areas of this state with a need for transmission projects,” he said. “The bill, which passed and was signed into law, specifically identified the Permian Basin and required that a reliability plan for the Permian region be developed.”
Longanecker said that as the need for more reliable baseload generation accelerates in the coming years from Texas’ growing population and power intensive sectors, including artificial intelligence, data centers and crypto mining, natural gas will continue to play a dominant role in providing reliable supply for decades to come.
“But further investment in production, infrastructure and natural gas power generation will be critical to meet this demand,” he said. “We applaud the Texas policymakers who are taking decisive action in response to this reality.
“The response to this program was overwhelming. By May 31 the PUCT announced that it had received 125 notices of intent to apply for a loan through the TEF. The 125 notices requested $38.9 billion in financing for 55,908 megawatts of proposed dispatchable power generation projects, eight times the size of the fund passed by the legislature.
“In response Gov. Greg Abbott and Lt. Gov. Dan Patrick have vowed to add an additional $5 billion to the TEF during the upcoming 89th Legislative Session.”
Ahead of a PUCT meeting on Aug. 29, the TIPRO leader said, agency staff filed a memorandum recommending loan application advancements to due diligence, noting the specific projects recommended to go through to the due diligence process and potentially receive a TEF loan.
“At the public meeting the PUCT commissioners finally approved the list of projects as recommended,” Longanecker said. “The plan includes a study of future oil and gas demand performed by S&P Global showing that by 2030 transmission service providers anticipate approximately 24 gigawatts of load in the region including 12 GW of oil- and gas-related load and another 12 GW of additional load largely attributable to data centers, crypto mining and hydrogen electrolysis facilities.”
He said the forecast also shows another 3 GW of oil- and gas-related load by 2038 for a total load projected demand of 27 GW.
“The demand is equivalent to almost one-third of the peak demand of the entire ERCOT system as of today,” Longanecker said. “Based on these forecasts ERCOT identified a significant number of transmission upgrades that will be required to meet these future demands.
“Aside from the incremental and heavily touted growth in non-dispatchable energy sources, Texans understand why these programs are so critically important to our state. Texas saw about 1.7 percent annual electricity demand growth, which aligns with a 1.6 percent population growth through 2022.
“This included more than 25,000 new businesses opening their doors in Texas from 2010 to 2019. But as ERCOT’s forecast shows that’s all changing.
“Between 2021 and 2023 Texas’ electricity demand increased by 16 percent. The two-year span was nearly half of the total demand increase over the prior two decades. During the summer of 2023 Texas broke electricity consumption records 10 times as air-conditioning demand from homes and businesses skyrocketed.”
He said power consumption hit a record 85,435 megawatts on Aug. 10, 2023, and ERCOT announced in April 2024 that it expected peak electricity demand in Texas to grow to 152 GW by 2030, a roughly 78-percent increase from current levels.
