By Nicole Jao
NEW YORK (Reuters) - Texas voters passed a constitutional amendment to create a $10 billion energy fund that aims to improve the reliability of power-generating infrastructures in the state.
The fund would go toward financing construction of new power-generating facilities and maintenance of existing infrastructure. Some 1.6 million voters, or 64.9%, favored the proposal titled Proposition 7 in the Nov. 7 constitutional amendment election.
The proposal is one of several efforts by lawmakers and regulators in Texas to avoid another energy crisis like Winter Storm Uri in February 2021 that left millions without power, water and heat for days.
Texas Energy Fund will be administered by the Public Utility Commission of Texas (PUCT) to provide lower interest loans and incentives to make the state's grid more reliable.
"Ever since Winter Storm Uri, Texas legislators and the PUCT have prioritized incentives for more dispatchable generation, with a primary focus on natural gas-fired power plants," said Winston Skinner, counsel at Vinson & Elkins.
"The Texas Energy Fund represents a very significant step towards that goal of new steel in the ground," said Skinner.
The bulk of the funds, $7.2 billion, will go into building and upgrading power-generating facilities in the ERCOT (Electric Reliability Council of Texas) region.
Another $1.8 billion will go to support the development of backup power sources for facilities in the state.
The rest of the funds will go to enhancing the reliability of transmission, distribution and power generation facilities outside of the ERCOT region.