Last Updated: June 12, 2026
Texas Energy Fund Backs a 570 MW Sherman Gas Plant — What It Means for Your Bill
Quick Summary: On June 4, 2026, Governor Greg Abbott's office announced the seventh Texas Energy Fund loan — a low-interest state loan of up to $411 million toward a new 570 MW natural gas plant near Sherman, built by Rayburn Electric Cooperative and expected online in 2028. It is part of a state push to add reliable, on-demand power to the ERCOT grid. It does not change your retail rate today, but it helps explain where Texas is steering its grid — and why your plan choice still matters more than any single project.
What Was Announced
According to the Office of the Texas Governor, the Public Utility Commission of Texas (PUCT) finalized its seventh loan agreement under the Texas Energy Fund (TxEF) In-ERCOT Generation Loan Program. The program offers low-interest loans for projects that add new, dispatchable power — generation that operators can turn up on demand — to the grid run by the Electric Reliability Council of Texas (ERCOT).
The headline details from the announcement:
- A 570 MW natural gas plant ("Rayburn Energy Station II") near Sherman, in North Texas
- Built by Rayburn Electric Cooperative, beside its existing Sherman facility
- Total project cost estimated at less than $685 million
- A 20-year PUCT loan up to $411 million (about 60% of cost) at a 3% interest rate
- Expected to begin generating power in 2028, in the ERCOT North Load Zone
PUCT Chairman Thomas Gleeson framed the fund as delivering on a voter mandate "to secure new, reliable power generation for Texas," adding that the goal is "ensuring Texas families and businesses have power they can depend on for years to come."
Why Texas Is Funding Dispatchable Power
Texas has added record amounts of solar and battery storage in recent years, but state leaders have also pushed to expand dispatchable generation — gas plants that can run regardless of sun or wind — to back up the grid as demand climbs. The Texas Energy Fund, which the Governor's office notes was approved by Texas voters, is the main vehicle for that push.
The Sherman project is one of several. Per the same announcement, this is the seventh finalized loan under the generation program, and six more applications were in due-diligence review, representing an additional 3,216 MW of proposed new dispatchable capacity for ERCOT.
The consumer angle: more firm, on-demand capacity is meant to reduce the risk of tight-grid conditions and the extreme wholesale price spikes that come with them. Those spikes are exactly what can make variable-rate plans expensive during summer peaks.
How This Reaches (and Doesn't Reach) Your Bill
It's easy to assume a big new power plant will move your monthly bill. Here's the more accurate picture:
| Factor | What It Actually Means for You |
|---|---|
| Timing | The plant is expected online in 2028 — no effect on summer 2026 rates. |
| Who funds it | A state loan program, not a line item added directly to your retail energy charge. |
| Grid reliability | More dispatchable capacity can ease scarcity pricing over time — a background effect on wholesale costs. |
| Your plan choice | Still the single biggest lever you control over your actual bill. |
In short: this project is good news for grid reliability and a useful signal about where Texas is investing, but it is not a reason to wait on shopping your plan. What you pay is set by your own usage and the plan you're on — today.
The Consumer Takeaway: Reliability Is Background, Your Plan Is Foreground
Projects like Rayburn Energy Station II are designed to keep the lights on during the hottest afternoons and reduce the grid stress that drives wholesale prices sky-high. That's the kind of volatility a fixed-rate plan protects you from and a variable-rate plan exposes you to. If you're on a variable or month-to-month plan heading into summer, this is a good moment to review your options.
But here's the part no headline can do for you: the cheapest plan depends on YOUR usage. A plan that advertises a low rate at exactly 1,000 kWh can quietly become one of the most expensive at 600 or 2,000 kWh — the "1,000 kWh illusion." The only way to know what you'll really pay is to compare plans at your actual usage and look at the real effective rate, not the advertised one.
Bottom line: let the state and ERCOT handle the megawatts. Your job is simpler — make sure the plan you're on is actually the cheapest one for the way you use electricity.
Related Texas Electricity Resources
The 1,000 kWh Illusion
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Compare Texas Electricity Plans at Your Real Usage
New power plants take years to build. Finding the cheapest plan for your home takes minutes. Compare plans now using your actual usage — not a misleading advertised rate.
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