Rockwall-based Rayburn Electric Cooperative plans to build a 570-megawatt natural gas power plant in Sherman, with a goal of generating power for the Electric Reliability Council of Texas (ERCOT) power region in 2028.
Rayburn has secured a loan from the Texas Energy Fund to construct the plant, Gov. Greg Abbott announced today. The loan agreement is the seventh to date from the fund, TxEF’s In-ERCOT Generation Loan Program, which provides low-interest loans for projects that add new, dispatchable power to the ERCOT region.
Rayburn will build the new plant near its existing Rayburn Energy Station 1 facility in Sherman, with the project interconnecting in the ERCOT North Load Zone. Formerly known as the Panda Sherman Power Plant, Rayburn Energy Station 1 was acquired by Rayburn in 2023 from Panda Power Funds LP, a private equity infrastructure firm.
Rayburn’s president and CEO, David A. Naylor, said the new Sherman plant—to be known as 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.”
“As our region continues to grow, investments in safe, reliable, and affordable power remain critical,” Naylor added in a statement. “We’re thankful to Governor Abbott, our legislators, and the PUCT [Public Utility Commission of Texas] for their continued leadership and focus on strengthening the ERCOT grid. We take great pride in being the first cooperative to qualify for and achieve funding under the Texas Energy Fund.”
Details of the loan agreement
Under the loan agreement, total project costs are estimated to be less than $685 million, the governor’s office said. The PUCT will provide a 20-year TxEF loan 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.
“Texas is the energy capital of the world because we invest in the power needed to support the growth of our state,” Gov. 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.”
Ensuring power ‘for years to come’
PUCT Chairman Thomas Gleeson said that when Texas voters overwhelmingly approved the Texas Energy Fund [TxEF], “they gave us a mandate to secure new, reliable power generation for Texas.”
““The TxEF is delivering on that promise, and Rayburn Electric Cooperative’s new 570 MW power plant is proof,” Gleeson added. “We’re ensuring Texas families and businesses have power they can depend on for years to come.”
In addition to the seven loan agreements already approved, six applications to the TxEF In-ERCOT Generation Loan Program are now moving through a due diligence review process, the governor’s office noted. Together, they represent 3,216 MW of additional new dispatchable power generation proposed for the ERCOT grid.
Don’t miss what’s next. Subscribe to Dallas Innovates.
Track Dallas-Fort Worth’s business and innovation landscape with our curated news in your inbox Tuesday-Thursday.
R E A D N E X T
-
You'll find deadlines coming up for a new accelerator program; and many more opportunities.
-
The Texas Innovation Operating System is tapping into what the partners call "a growing alignment across Texas for a broader innovation community." The connected system aims to be a first step in what the partners describe as "the G20 of Texas Cities in Innovation"—promoting regional innovation as well as connecting into the broader statewide network.
-
The W3 wearable device continuously monitors a worker's core body temperature, heart rate variability, and other indicators of fatigue and dehydration, transforming them into "clear, objective warnings" before the worker reaches a critical threshold, Zackat Labs said.
-
Texas Instruments invented the world's first handheld electronic calculator prototype in 1967. This week, it launched a new graphing calculator "built to meet the demands of today's math classroom" and to grow with students from middle school algebra all the way through college and future STEM careers.
-
Hillwood’s 27,000-acre AllianceTexas development has long served as a proving ground for what’s next in logistics. Now, through decades of public-private partnership, the creation of a Smart Port, and the integration of forward-thinking policy, AllianceTexas is helping define the future of freight by positioning North Texas to lead in the algorithmic age of supply chain infrastructure.
-
![Jeb Hensarling [Photo: Grant Miller Photograhy/Venture Dallas]](https://s24806.pcdn.co/wp-content/uploads/2025/11/20251030VentureDallasConference-DSC_6240.jpg)
In a Bloomberg interview with Julie Fine, the former congressman laid out TXSE's timeline: trading this summer, listings in Q4, and first IPOs in Q1 2027.
-
“With more than 300 animal-focused organizations participating in this fundraising campaign, NorthTexasGivingDay.org makes it easy to support nonprofits you know and love while also discovering new ones making an impact on the lives of pets and their families,” said Communities Foundation of Texas President and CEO Wayne White.
-
Participants at the Pegasus Park event had 48 hours to turn early-stage concepts and functional prototypes into actionable solutions "to improve health outcomes, expand access, improve patient experience, and drive system-wide efficiency," Health Wildcatters said.
-
In a letter to GameStop CEO Ryan Cohen, the billionaire co-founder of Chewy, eBay Board Chairman Paul S. Pressler poured cold water on the Grapevine-based company's acquisition bid.
-
GoLabs said Unitree's autonomous quadrupeds use an integrated 4D LiDAR system and SLAM technology to create 3D maps of their security perimeter. Companies can then give the robots automated patrol paths and checkpoints, making a security system "both simple and efficient."
