The Kerrville City Council unanimously approved funding for the Kerrville Public Utility Board’s (KPUB) proposed natural gas-fired power generation facility, marking a significant milestone in the Texas public power utility’s strategic plan to provide long-term cost stability for customers.
With this approval, KPUB will move forward with the financing and development of the project, which will be a natural gas-fired reciprocating internal combustion engine (RICE) generation plant.
Project costs to build the facility are estimated to be up to $175 million, with 60% funded through a low-interest loan from the Texas Energy Fund (TEF) and the remaining 40% through tax-exempt revenue bonds issued by KPUB. Construction is set to begin by summer 2025, with the plant expected to be operational by June 2027.
“Our Board, members of City Council, and staff have invested countless hours and participated in numerous meetings to thoroughly review, evaluate, and advance this project,” said Mike Wittler, KPUB General Manager & CEO. “Their commitment and thoughtful decision-making have been instrumental in ensuring this investment is the right path forward for our utility and the community we serve.”
KPUB is one of 16 projects selected from 72 applicants to advance in the TEF In-ERCOT Generation Loan Program and the only municipally owned project.
Established by the Texas Legislature and administered by the Public Utility Commission of Texas (PUCT), the TEF program is designed to add up to 10,000 MW of new dispatchable power generation to support grid reliability across the state.
The approved RICE generation plant will provide up to 122 MW of peak capacity and offer key advantages, including high efficiency, minimal water usage, and quick response to power demand fluctuations. Due to the project's competitive nature, the plant’s location—situated outside KPUB’s service area due to natural gas pipeline infrastructure limitations—will be announced at a later date.
While KPUB will remain part of the ERCOT market, this project—combined with an updated hedging program—will provide added protection from price volatility, especially during extreme weather events such as Winter Storm Uri in 2021, the Texas public power utility noted.
