AUSTIN, Texas — The Public Utility Commission of Texas (PUCT) has executed its fifth agreement under the Texas Energy Fund (TxEF) Completion Bonus Grant (CBG) Program, supporting a major expansion project aimed at increasing electricity generation capacity and strengthening grid reliability across the state.
The agreement has been signed with Tejas Power Generation, LLC, a subsidiary of Shell Energy North America (US) L.P., for a 146-megawatt (MW) expansion of the Friendswood Energy Center located in southwest Houston. According to the Electric Reliability Council of Texas (ERCOT), a single megawatt of electricity can power approximately 250 homes, highlighting the significance of the additional capacity being added to the state’s power network.
The expansion comes as Texas continues to face rising electricity demand driven by population growth, economic development and increasing energy consumption across residential, commercial and industrial sectors. State officials have focused on boosting dispatchable power generation resources capable of responding quickly to fluctuations in demand and extreme weather conditions.
PUCT Chairman Thomas Gleeson said the additional generation capacity would play an important role in maintaining a reliable electricity supply for Texans.
“Every new megawatt available to the ERCOT grid at virtually the push of a button means more energy security and reliability for Texans,” PUCT Chairman Thomas Gleeson said. “Texas families and businesses can rest assured we will have the power generation we need, when we need it, even during extreme weather.”
The Friendswood Energy Center expansion builds on the facility’s existing natural gas-fired combustion turbine operations. Once fully operational, the new generation unit will provide additional dispatchable energy capable of being called upon when electricity demand peaks or when weather conditions place additional stress on the grid.
The expanded facility officially connected to ERCOT’s Houston Load Zone on May 21, 2026, making the additional generation capacity available to support one of the fastest-growing electricity markets in North America.
Under the terms of the agreement, Tejas Power Generation may receive a maximum grant award of $17.52 million. The funding will be distributed through annual payments of up to $1.75 million over a ten-year period, subject to the facility meeting specific performance requirements.
The Completion Bonus Grant Program is designed to encourage the development and completion of qualifying electric generation projects that can supply power to the ERCOT grid before June 1, 2029. The initiative forms part of Texas’ broader strategy to improve long-term energy reliability and ensure sufficient generation resources are available to meet future demand.
However, grant payments are contingent upon operational performance. ERCOT will conduct annual evaluations to determine whether the new generation unit meets the programme’s reliability standards. Performance will be measured during a designated test period and compared with a reference group of generation facilities within the ERCOT region that do not receive grant funding.
The first testing period for the Friendswood Energy Center expansion began on June 1, 2026, and will run through May 31, 2027. Following the completion of that assessment period, Tejas Power Generation may become eligible to receive its first grant payment if the facility satisfies the required performance benchmarks.
The performance criteria are outlined under the PUCT’s Completion Bonus Grant Program rules, which establish how generation facilities are evaluated and how incentive payments are determined.
The Completion Bonus Grant Program is one of four initiatives operating under the Texas Energy Fund framework. The broader fund was established to support investments in power infrastructure, encourage the addition of new generation resources and enhance the resilience of the Texas electricity system.
As electricity demand continues to increase across the state, officials view projects such as the Friendswood Energy Center expansion as an important component of ensuring reliable and readily available power supplies for homes, businesses and critical infrastructure during both routine operations and periods of extreme weather.
