More taxpayer funded semi-conductor, power plants launching in Texas

Another Texas Energy Fund (TxEF) loan agreement was also signed, this time for $400 million with Rayburn Electric Cooperative to build a 570 megawatt (MW) natural gas power plant in Sherman, Texas. 

Soulbrain says it’s making a $120 million capital investment and its new facility will create 20 high-skilled jobs. Phase 1 of the project will support an annual production capacity of 28,800 metric tons of high-selectivity and high-purity phosphoric acid (H₃PO₄), a critical material used in semiconductor wafer cleaning and etching processes, it says.

Soulbrain President Jon Park said the funds will help the company “expand advanced materials capabilities in Texas, strengthen the domestic semiconductor ecosystem, and create high-value manufacturing and engineering opportunities for Texans.”

The TSIF is an outworking of the Texas’ CHIPS Act, enacted in 2023. It created a new Texas CHIPS Office, allocated $700 million for the TISF fund and established grants, and the Texas Semiconductor Innovation Consortium, The Center Square reported. 

Similarly, several laws were enacted since 2021 to strengthen the Texas grid, including expanding reliable dispatchable power generation prioritizing natural gas. In 2023, the legislature created a $5 billion TxEF loan program and voters overwhelmingly passed a constitutional amendment to expand “the construction, maintenance, modernization, and operation of electric generating facilities,” The Center Square reported.   

The rollout of the TxEF was so successful that the legislature increased funding for it. It appropriated $5 billion to fund TxEF for fiscal years 2025-2026 and an additional $4 billion for fiscal years 2027-2028, The Center Square reported.

Rayburn Electric Cooperative was awarded the seventh TxEF loan agreement since the program was launched. The funds will be used to build a new facility near its existing Rayburn Energy Station 1 facility in Sherman. The project will interconnect with the Electric Reliability Council of Texas (ERCOT) North Load Zone power region in 2028.

“Texas is the energy capital of the world because we invest in the power needed to support the growth of our state,” Gov. Greg Abbott said in a statement. “The Texas Energy Fund brings new, reliable generation online to ensure our power supply meets demand. This project is another step toward keeping our grid strong and our economy the envy of the world.”

“Rayburn Energy Station II represents a major milestone and strategic investment in reliability for our four Member cooperatives and the communities we serve across North Texas,” Rayburn President and CEO David Naylor said in a statement. “As our region continues to grow, investments in safe, reliable, and affordable power remain critical. We take great pride in being the first cooperative to qualify for and achieve funding under the Texas Energy Fund.”

TxEF’s In-ERCOT Generation Loan Program provides low-interest loans for projects that add new, dispatchable power to the ERCOT region. Under the loan agreement, total project costs are estimated to be less than $685 million, the Public Utility Commission of Texas, which administers the TxEF, said. The PUCT is providing a 20-year TxEF loan of up to $411 million, or 60% of total cost, at a 3% interest rate. The loan term runs from June 3, 2026, through June 3, 2046. 

In addition to the seven loan agreements already approved, the PUCT is currently reviewing six TxEF applications. Combined, they represent an additional 3,216 MW of proposed, new dispatchable generation for the ERCOT grid.  

Last month, similar announcements were made, Texas A&M University is expanding its semiconductor research and a new natural gas power plant is coming online in Freestone County, The Center Square reported.