The Public Utility Commission of Texas (PUCT) has executed its first agreement under the Texas Energy Fund (TxEF) Completion Bonus Grant (CBG) Programme, marking a significant step in the state’s effort to strengthen its power grid. The deal, announced in Austin, Texas, involves a partnership with the Lower Colorado River Authority (LCRA) to support a 188-megawatt (MW) natural gas power plant in Caldwell County.
The initiative is part of a broader strategy to incentivise the timely construction of power generation facilities that can deliver reliable electricity to the Electric Reliability Council of Texas (ERCOT) grid before June 2029. The PUCT described the agreement as a milestone in ensuring Texas’s growing energy demand is met with resilient and responsive infrastructure.
“Texas’ electric grid is evolving rapidly to meet the needs of our growing economy and rising energy demand,” PUCT Chairman Thomas Gleeson said. “I am pleased to see the TxEF’s Completion Bonus Grant Program is already incentivizing ‘speed to market’ in the construction of safe, reliable power plants in Texas. This LCRA power plant will help us both meet the needs of today and prepare our grid for the future.”
Under the terms of the grant, LCRA is eligible to receive a maximum award of $22.56 million for its Timmerman Power Plant Unit 1 project. The total sum may be disbursed in annual instalments of up to $2.256 million over a ten-year period, contingent on the facility’s operational performance.
Performance-Based Funding Tied to Grid Reliability
Payments under the CBG programme are performance-based, with the amount each year determined by the power plant’s output and reliability during ERCOT’s defined “test period.” ERCOT measures the plant’s results against a reference group of other generation resources within its region. The performance standards are detailed in the PUCT’s CBG rule, ensuring that only plants meeting or exceeding reliability expectations receive full funding.
The Timmerman Power Plant Unit 1 will undergo its first test period from 1 June 2026 to 31 May 2027. Following successful evaluation, LCRA could receive its initial payment under the grant. This timeline aligns with the state’s push to bring new capacity online well before the end of the decade.
Fast-Start Natural Gas Plant Designed for Responsiveness
LCRA’s Timmerman Power Plant Unit 1 is designed for rapid response to demand fluctuations. The natural gas-powered facility can start within 45 seconds and ramp up to full capacity in under five minutes, offering critical flexibility to the grid during peak demand or supply shortages. The plant officially connected to the ERCOT grid on 14 August 2025, demonstrating the PUCT’s intention to reward projects that achieve early completion and operational readiness.
By supporting such fast-start plants, the state aims to improve both the reliability and responsiveness of its electricity system—two factors that became central concerns following the severe grid disruptions experienced in Texas during past extreme weather events.
Broader Energy Fund Objectives
The Completion Bonus Grant is one of four components of the Texas Energy Fund, a multi-faceted initiative established to promote investment in the state’s energy infrastructure. Through the TxEF, the PUCT provides a framework for financial incentives, loans, and grants that accelerate the delivery of new power generation capacity.
Officials say the fund is crucial to meeting Texas’s long-term power needs, particularly as rapid population growth and industrial expansion increase electricity consumption. The CBG programme specifically targets projects that can be brought online swiftly and operate dependably within ERCOT’s competitive market.
Reinforcing the Future of the Texas Grid
The PUCT’s latest move is seen as part of a broader shift towards a more resilient and diversified grid system. While renewable energy sources continue to expand across the state, the inclusion of fast-start natural gas plants ensures a balanced mix of generation types that can maintain stability during variable weather conditions or periods of high demand.
The agreement with LCRA signals that the Completion Bonus Grant mechanism is now active and operational—an early indication that Texas’s strategy to secure its grid through targeted financial incentives is beginning to deliver results.
Further details about the Texas Energy Fund and the Completion Bonus Grant Programme can be found on the Public Utility Commission of Texas website.
