NRG Says It Would Build New Gas Plants If Texas Approves Payouts

(Bloomberg) -- NRG Energy Inc. plans to build more natural gas-fired plants in Texas if lawmakers back a proposal to launch new payouts to generators as part of reforms to fortify its state against blackouts. 

The Houston-based independent power producer is “in the late stages” of developing projects that will add more than 1.5 gigawatts in Texas, spokeswoman Ann Duhon said in an email. These include a large gas plant and two smaller peaker units that are meant to ramp up and down quickly to react to swings in demand as well as solar and wind generation. NRG has about 11 gigawatts of gas, coal and nuclear generation in the state. 

Texas is scrambling to figure out how to reform the state power market to avoid a repeat of the Feb. 2021 blackouts, meet fast growing demand and back up wind and solar power. For NRG, the critical factor will be whether lawmakers back the so-called performance credit mechanism that the Public Utility Commission of Texas passed earlier this year, Duhon said. The PCM is a controversial plan to pay power plants for being online during critical hours each year. 

NRG is opposing an even more contested proposal to use state funds to build plants during emergencies. 

If the legislature “disavows state-sponsored generation and PCM is allowed to function properly, NRG could move forward with projects prior to full PCM implementation,” Duhon said. 

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