In a strategic move to bolster Texas’ electric reliability beyond the ERCOT grid, the Public Utility Commission of Texas (PUCT) has approved a groundbreaking rule establishing the Texas Energy Fund (TEF) Outside of ERCOT Grant Program (OEGP). This initiative aims to modernize infrastructure, enhance weather resilience, and improve reliability for electric utilities and power generators operating outside the ERCOT-managed grid.

PUCT Chairman Thomas Gleeson emphasized the significance of the program, stating, “Every corner of our state faces unique weather threats and challenges. Ensuring that all Texas electric utilities and power generators maintain a resilient system is essential to providing reliable, affordable power to all Texans.”

Expanding Energy Security Beyond ERCOT

While ERCOT covers approximately 75% of Texas’ geographical area, several communities rely on utilities outside of its jurisdiction. The newly approved rule, codified as TAC 16 §25.512, brings critical support to these regions by implementing provisions from Senate Bill 2627, passed by the 88th Texas Legislature and signed into law by Governor Greg Abbott in 2023.

The grant program enables eligible utilities and generators to apply for funding for key initiatives such as:

• Facility Modernization – Upgrading outdated infrastructure to improve efficiency and reliability.
• Weatherization Efforts – Strengthening power generation facilities against extreme weather conditions.
• Reliability & Resiliency Enhancements – Implementing advanced technologies to prevent outages and ensure grid stability.
• Vegetation Management – Reducing risks from fallen trees and overgrown vegetation near power lines.

Eligibility and Restrictions

To ensure targeted impact, grant recipients must be Texas-based entities operating outside ERCOT’s grid. Funds cannot be used for debt repayment or to finance projects beyond Texas’ borders. The application process includes a rigorous review to guarantee accountability and effectiveness.

Powering Texas Forward

The OEGP is one of four programs under the Texas Energy Fund, created through the Powering Texas Forward Act. The latest rule marks the third TEF initiative approved by the PUCT, following the In-ERCOT Generation Loan Program and the Completion Bonus Grant Program, which were adopted earlier this year.

With Texas facing increasingly severe weather patterns, initiatives like the OEGP are vital for ensuring that residents statewide—regardless of their energy provider—have access to dependable electricity. For more information on grant applications and eligibility, visit the PUCT website.