KPUB plans new natural gas plant outside Kerr County to stabilize rates

The Kerrville Public Utility Board (KPUB) is taking significant steps towards enhancing local energy reliability and affordability by proposing a new natural gas-fired power generation plant. During the recent City Council meeting on March 11, 2025, KPUB officials outlined their plans to construct a 22-megawatt facility, which they believe will stabilize energy rates for residents and businesses in Kerrville.

KPUB has been exploring ownership of power generation assets for over two decades, and this project is seen as a crucial move to ensure competitive pricing and reliable service. Currently, KPUB relies on a load-following agreement with CPS Energy, which is set to expire in 2026. The utility's leadership emphasized that continuing to rent power through agreements is becoming increasingly costly and volatile, akin to the rising costs in the housing market. By investing in their own generation capacity, KPUB aims to reduce rates by approximately 15% compared to continuing with existing agreements.

The proposed plant is designed to be highly efficient and capable of operating under extreme weather conditions, with minimal water usage. KPUB plans to fund the project, estimated to cost between $160 million and $165 million, through a combination of loans from the Texas Energy Fund and tax-exempt revenue bonds. The Texas Energy Fund, established by Texas voters, offers a favorable 3% interest rate, while the bonds are expected to be issued at around 4.6%.

Public outreach has been a priority for KPUB, with extensive efforts to engage the community through presentations, surveys, and social media campaigns. Feedback from nearly 1,000 customers indicated strong support for stable and competitive rates, even if it requires significant investment in the new power plant.

As the project moves forward, KPUB is committed to keeping the community informed and involved in the process. The anticipated completion date for the plant is June 2027, marking a pivotal step in Kerrville's energy future and its commitment to providing reliable utility services at the lowest responsible price.