Texas Approves $2.4B Entergy Gas Plants With Cost Cap to Shield Customers

Two new plants will add more than 1,200 MW in southeast Texas, but regulators set strict guardrails to protect ratepayers.

The Public Utility Commission of Texas (PUCT) on Thursday gave Entergy the green light to build two new gas-fired power stations in southeast Texas — while setting a $2.4 billion “hard cap” on project costs to ensure customers don’t foot a higher bill than expected.

The 754-megawatt Legend Power Station and 453-MW Lone Star Power Station are slated to come online by mid-2028. Together, they will add dispatchable generation to a region where Entergy projects peak demand will grow nearly 20% by the end of the decade, driven by new residents, manufacturing, and industrial expansion.

“These new resources are necessary,” PUCT Chair Thomas Gleeson said at the commission’s open meeting. “But we also have the mandate to protect customers, and I think this accomplishes both.”

Entergy Texas serves 524,000 customers across 27 counties and is connected to the Midcontinent Independent System Operator (MISO). The utility argued that the plants are 25% cheaper than comparable projects in today’s market and will yield more than $280 million in net benefits.

Some stakeholders questioned the absence of a request for proposals (RFP) process, which is not required under Texas law but is sometimes used to compare project options. The Texas Industrial Energy Consumers group and the Office of Public Utility Counsel suggested an RFP could have provided added assurance on cost-effectiveness. Regulators acknowledged those perspectives but ultimately agreed with Entergy’s assessment of need, approving both projects under a $2.4 billion cost cap to safeguard customers.

The commission ultimately sided with Entergy’s need case, approving both projects under strict financial limits. Costs are capped at $1.6 billion for Legend and $799 million for Lone Star, inclusive of financing charges. Any overruns will not be recoverable from customers.

Why It Matters

Texas is racing to balance reliability with affordability. The state continues to grapple with rising demand, extreme weather threats, and the need for firm power alongside its fast-growing renewable fleet. By approving the plants with cost caps, regulators are signaling support for new generation while pushing utilities to hold the line on spending.

Wall Street analysts called the decision “constructive” for Entergy, noting the company’s history of delivering projects on time and within budget. But the cap also introduces risk for investors if costs escalate.

For ratepayers, the takeaway is clear: more power is coming to a fast-growing corner of Texas, but regulators are watching the price tag closely.

The Bottom Line

The Entergy approval highlights a central tension in the U.S. energy transition: how to expand dispatchable resources quickly enough to meet soaring demand without saddling customers with runaway costs.

In Texas, where peak load growth is accelerating and industrial development is booming, the answer — at least for now — is new gas plants under tight regulatory guardrails. Whether that balance holds as the grid evolves will be the next test.

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