Tex. Utilities Code § 34.0104 — TX Code / Code ut / Chapter 34 / Section 34.0104
§ 34.0104. LOANS FOR ERCOT POWER REGION.
Status: in_force

(a) The commission may use money in the fund without further appropriation to provide loans to finance upgrades to existing dispatchable electric generating facilities providing power for the ERCOT power region that result in a net increase of at least 100 megawatts of capacity for each facility or the construction of dispatchable electric generating facilities providing power for the ERCOT power region that each have a generation capacity of at least 100 megawatts. For the purposes of this section, a generating facility is considered to be dispatchable if the facility's output can be controlled primarily by forces under human control. An electric energy storage facility is not eligible for a loan under this section.

(b) The commission may provide a construction loan under this section only:

(1) for construction of a facility that will have a generation capacity of at least 100 megawatts and that does not meet the planning model requirements necessary to be included in the Capacity Demand and Reserves Report of the independent organization certified under Section 39.151 for the ERCOT power region before June 1, 2023;

(2) in an amount that does not exceed 60 percent of the estimated cost of the facility to be constructed; and

(3) if the agreement ensures that the loan is to be the senior debt secured by the facility.

(b-1) Notwithstanding Subsection (b)(3):

(1) a construction loan provided to a municipally owned utility, or an instrumentality of a municipal corporation established for the benefit of a municipally owned utility, may be in the form of a public security, as defined by Section 1201.002, Government Code, issued by the loan applicant if the public security is payable on a parity basis with other debt of the loan applicant secured by a senior lien on net revenues of the facility or the loan applicant's utility system; and

(2) a construction loan provided to an electric cooperative may be secured by a senior lien on substantially all electric system assets of the electric cooperative, including the facility for which the loan is provided, payable on a parity basis with other debt of the loan applicant secured by a senior lien.

(c) The commission shall evaluate an application for a loan under this section based on:

(1) the applicant's:

(A) quality of services and management;

(B) efficiency of operations;

(C) history of electricity generation operations in this state and this country;

(D) resource operation attributes;

(E) ability to address regional and reliability needs;

(F) access to resources essential for operating the facility for which the loan is requested, such as land, water, and reliable infrastructure, as applicable; and

(G) evidence of creditworthiness and ability to repay the loan on the terms established in the loan agreement, including the applicant's total assets, total liabilities, net worth, and credit ratings issued by major credit rating agencies;

(2) the generation capacity and estimated costs of the project for which the loan is requested; and

(3) any other factors the commission considers appropriate.

(d) Outstanding loans provided under this section may not support the addition or construction of more than 10,000 megawatts of generation capacity.

(e) An electric utility other than a river authority may not receive a loan under this section.

(f) A loan provided under this section must:

(1) have a term of 20 years;

(2) be payable ratably starting on the third anniversary of the estimated commercial operation date of the facility for which the loan was provided, as stated in the loan application; and

(3) bear an interest rate of three percent.

(g) The commission shall require each recipient of a loan under this section to deposit in an escrow account held by the comptroller an amount of money equal to three percent of the estimated cost of the project for which the loan is provided. The deposit must be made before the initial loan funds are disbursed. The loan recipient may not withdraw the deposit unless authorized by the commission.

(h) For money deposited under Subsection (g) for a loan for the construction of a new facility, the commission:

(1) shall authorize the loan recipient to withdraw the deposit from the escrow account if the facility for which the loan was provided is interconnected in the ERCOT power region before the fourth anniversary of the date the initial loan funds were disbursed; or

(2) after the fourth anniversary of the date the initial loan funds were disbursed, may authorize the loan recipient to withdraw the deposit from the escrow account if the facility for which the loan was provided is interconnected in the ERCOT power region not later than the fifth anniversary of the date the initial loan funds were disbursed and the commission determines that extenuating circumstances justify the delay in completion.

(i) For money deposited under Subsection (g) for a loan for an upgrade to an existing facility, the commission:

(1) shall authorize the loan recipient to withdraw the deposit from the escrow account if the project for which the loan was provided is completed before the third anniversary of the date the initial loan funds were disbursed; or

(2) after the third anniversary of the date the initial loan funds were disbursed, may authorize the loan recipient to withdraw the deposit from the escrow account if the project for which the loan was provided is completed not later than the fourth anniversary of the date the initial loan funds were disbursed and the commission determines that extenuating circumstances justify the delay in completion.

(j) The comptroller shall deposit to the credit of the fund any escrow funds described by Subsection (g) that the commission may not authorize to be withdrawn by a loan recipient.

(k) Information submitted to the commission at any time for the purpose of enabling the commission to make a determination on the award of a loan under this section is confidential and not subject to disclosure under Chapter 552, Government Code.

(l) The commission may disburse the initial funds for a loan under this section after December 31, 2025, if the commission determines that market factors necessitate an extension of the deadline for disbursement of initial funds. An applicant may request disbursement of initial funds after December 31, 2025. The commission shall approve or deny the request on a case-by-case basis.

(m) This section expires September 1, 2050.