The Public Utility Commission of Texas (PUCT) has executed the second agreement under the Texas Energy Fund’s Completion Bonus Grant (CBG) Programme, marking another step in the state’s effort to accelerate reliable power generation capacity across the ERCOT grid.
The agreement has been signed with the Lower Colorado River Authority (LCRA) for Timmerman Unit 2, a 188-megawatt natural gas peaker facility located in Caldwell County, Texas. The unit forms part of the wider Timmerman Power Plant project and is designed to provide rapid-response electricity generation to support grid stability during periods of high demand.
The Completion Bonus Grant Programme is intended to encourage the development of dispatchable generation resources capable of supplying power to the Electric Reliability Council of Texas (ERCOT) before 1 June 2029. The programme forms one of four initiatives established under the Texas Energy Fund (TxEF), which was approved to strengthen the resilience and reliability of the state’s electricity infrastructure.
“Texans overwhelmingly approved the Texas Energy Fund to bring reliable power generation to the grid quickly and responsibly,” PUCT Chairman Thomas Gleeson said. “The Completion Bonus Grant Program is incentivizing “speed to market” and helping bring new, reliable power online today. LCRA’s new unit is another example of the kind of dependable generation that will support Texas’ continued growth for years to come.”
Under the terms of the agreement, LCRA could receive up to $22.56m in grant funding for the project. Payments would be distributed over a ten-year period, with annual awards capped at $2.256m per year.
The funding structure is performance-based, with annual payments dependent on how effectively the unit operates compared with other generation assets within the ERCOT market. ERCOT will conduct assessments over ten separate annual “test periods”, each beginning on 1 June and ending on 31 May of the following year.
Following the conclusion of each assessment period, Timmerman Unit 2’s operational performance will be measured against a reference group of comparable generation resources that do not receive grant support under the programme. Performance criteria and evaluation standards are set out in the PUCT’s Completion Bonus Grant rules.
The project’s first test period will run from 1 June 2026 through to 31 May 2027. Subject to meeting the required operational benchmarks, LCRA would then become eligible to receive its first annual grant payment.
Timmerman Unit 2 was connected to the ERCOT grid on 16 April 2026, approximately one month ahead of schedule. The facility has been designed as a fast-start natural gas peaker plant capable of beginning operations within 45 seconds and reaching full generating capacity in under five minutes.
Such facilities are increasingly viewed as important balancing resources within electricity markets facing growing demand pressures and higher levels of intermittent renewable energy generation. Rapid-response units can provide additional grid support during extreme weather conditions, peak consumption periods and unexpected supply shortfalls.
The second unit is located adjacent to Timmerman Unit 1, which entered commercial operation on 14 August 2025. Unit 1 was also notable for becoming the first project to receive an award through the Completion Bonus Grant Programme.
Both generating units are identical in scale and design, each contributing 188 MW of capacity. Combined, the two facilities now provide a total of 376 MW to ERCOT’s LCRA Load Zone.
Texas continues to experience strong electricity demand growth driven by population increases, industrial expansion and the rapid development of energy-intensive sectors such as data centres and advanced manufacturing. State authorities have increasingly prioritised investments aimed at improving dispatchable generation capacity following recent concerns around grid reliability during severe weather events.
The Texas Energy Fund was established as part of broader efforts to incentivise the development of new power infrastructure while maintaining reliability standards across the state’s electricity market. The Completion Bonus Grant Programme specifically rewards projects capable of delivering operational generation capacity within targeted timelines.
PUCT said the Timmerman Unit 2 agreement represents the second completed grant arrangement under the programme as Texas continues to advance additional generation projects intended to strengthen long-term grid resilience.
