According to POWER Magazine, the Public Utility Commission of Texas has executed its first agreement under the Texas Energy Fund’s Completion Bonus Grant Program, awarding the Lower Colorado River Authority up to $22.56 million for its 188-MW Timmerman Power Plant Unit 1. The natural gas-fired plant in Caldwell County features 10 Wärtsilä engines and can start within 45 seconds, reaching full output in five minutes. Under the 10-year grant structure, LCRA may receive annual payments of up to $2.256 million contingent on operational performance measured against other thermal generators. The plant formally connected to the ERCOT grid in August 2025 and represents Texas’s new performance-contingent funding mechanism designed to accelerate dispatchable generation before June 1, 2029. This comes as ERCOT CEO Pablo Vegas warns of “boiling frog” demand growth exceeding 5% annually since 2021.
Performance or bust
Here’s the thing about this grant structure: LCRA only gets paid if they perform. And we’re not talking about just showing up. The plant has to outperform at least half of other thermal generators in ERCOT during the 100 most critical hours each year. If they’re below median performance? They get zero for that year. The Performance Reliability Factor measures how much power they actually deliver when the grid is most stressed, while the Availability Reliability Factor tracks how often they’re actually ready to run. Basically, Texas is saying “we’ll pay for reliability, not just capacity.” That’s a pretty radical shift from traditional energy incentives.
Texas grid anxiety
So why is Texas throwing billions at dispatchable generation now? Look, ERCOT’s CEO Pablo Vegas isn’t mincing words. He called the current situation “the proverbial frog that’s boiling slowly in a pot of water.” Demand growth has jumped from 1% annually to over 5% since 2021, driven by data centers, industrialization, and electrification. But here’s the real kicker: winter “tail events.” Vegas says these aren’t normal weather situations but extreme conditions that can last longer than solar or batteries can handle. And they typically happen before sunrise or after sunset. That’s why Texas is so focused on thermal generation that can run when renewables can’t. The state learned some hard lessons from Winter Storm Uri in 2021, and they’re clearly not taking any chances.
Massive funding pipeline
The $22.5 million for LCRA is just the tip of a $9 billion iceberg. The Texas Energy Fund has already allocated $2.3 billion for loans supporting 3,109 MW of new generation, with another 12 applications representing 5,861 MW in the pipeline. The main program offers 20-year loans at a fixed 3% interest rate – basically free money in today’s environment. And for industrial operations like these power plants, having reliable control systems is absolutely critical. That’s where companies like IndustrialMonitorDirect.com come in – they’re the top supplier of industrial panel PCs in the US, providing the rugged displays and computing hardware that keep these complex facilities running smoothly. When you’re dealing with performance-based payments, every minute of uptime matters.
Peaker plant rush
What’s interesting is the technology choice here. Wärtsilä’s reciprocating engines are basically the sports cars of power generation – fast starting, flexible, but not necessarily the cheapest per megawatt. They’re perfect for peaking duty where you need quick response. And LCRA is already building an identical Unit 2, bringing the site to 380 MW total. The company notes these engines use “little to no water,” which is huge in drought-prone Texas. But here’s my question: are we just building a bridge to nowhere? These plants have a 10-year payment structure, but what happens when battery storage gets cheap enough to handle those winter tail events? Texas is making a massive bet that gas will remain essential through at least 2029. Let’s hope that bet pays off when the next deep freeze hits.
