Texas bets $350 million on becoming America's advanced nuclear capital

Overview

Texas has opened applications for a $350 million fund to jumpstart advanced nuclear reactor construction — the largest state-level nuclear energy investment in the United States. The Texas Advanced Nuclear Energy Office, created by legislation Governor Greg Abbott signed in June 2025, is now accepting proposals from companies that want to build next-generation reactors, manufacture nuclear components, or rebuild the domestic nuclear fuel supply chain. But there's a catch: only two projects in the state currently meet the fund's requirement of having a construction permit application filed with federal regulators.

Why it matters

Texas is betting hundreds of millions that advanced nuclear reactors can solve the AI-era power crisis before the grid breaks again.

Key Indicators

$350M

State nuclear fund size

Largest state-level investment in nuclear energy in the United States

Eligible projects today

Only two Texas projects currently have docketed construction permits with the Nuclear Regulatory Commission

134-9

House vote on HB 14

Overwhelming bipartisan support in the Texas House of Representatives

43 GW

Projected new power demand

Additional electricity capacity Dallas-Fort Worth alone may require in the coming years

320 MW

First planned project capacity

Four X-energy Xe-100 reactors planned at Dow's Seadrift chemical plant

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People Involved

Greg Abbott

Leading state nuclear expansion campaign

Cody Harris

Author of HB 14

Jarred Shaffer

Administering $350M fund

Organizations Involved

Texas Advanced Nuclear Energy Office (TANEO)

State Government Office

Accepting applications for $350M fund

State office within the Governor's administration created by HB 14 to coordinate advanced nuclear development and administer the $350 million Texas Advanced Nuclear Development Fund.

X-energy

Nuclear Technology Company

Building first commercial advanced reactor deployment at Dow's Seadrift plant

Developer of the Xe-100 high-temperature gas-cooled small modular reactor, with its first commercial deployment planned at Dow's Texas chemical plant.

Last Energy

Nuclear Technology Startup

Planning 30 microreactors in Haskell County, Texas

Startup planning a 30-microreactor deployment on a 200-acre site in Haskell County, Texas, to serve data center customers in the Dallas-Fort Worth region.

Timeline

TANEO opens $350 million fund for applications
Policy

Texas officially began accepting applications for the Advanced Nuclear Construction Reimbursement Program and the Project Design and Supply Chain Reimbursement Program. Notice of intent is due April 23, 2026; formal applications by May 14, 2026.
April 1st, 2026
Jarred Shaffer appointed TANEO director
Personnel

Governor Abbott named Jarred Shaffer as the first director of TANEO to oversee the office and administer the nuclear fund.
September 18th, 2025
Governor Abbott signs HB 14 into law
Legislative

Abbott signed House Bill 14, creating the Texas Advanced Nuclear Energy Office and the $350 million Texas Advanced Nuclear Development Fund, effective September 1, 2025.
June 20th, 2025
NRC expedites Dow/X-energy permit review
Regulatory

The NRC announced an 18-month review timeline for the Dow/X-energy construction permit — roughly half the typical 30-36 month period — potentially clearing construction by late 2026.
June 1st, 2025
Texas Senate passes HB 14
Legislative

The Senate approved HB 14 by a vote of 26-5. The House concurred in Senate amendments two days later, 118-6.
May 28th, 2025
Texas House passes HB 14 overwhelmingly
Legislative

The House approved HB 14 by a vote of 134-9, reflecting broad bipartisan support for the nuclear fund.
April 23rd, 2025
Dow and X-energy submit NRC construction permit application
Regulatory

Dow submitted a construction permit application to the NRC for four 80-megawatt Xe-100 reactors at its Seadrift chemical plant, backed by $1.2 billion in Department of Energy funding.
March 31st, 2025
Last Energy announces 30-microreactor Texas deployment
Industry

Last Energy unveiled plans to build 30 microreactors on a 200-acre site in Haskell County to power data centers in the Dallas-Fort Worth region.
February 1st, 2025
HB 14 filed in 89th Texas Legislature
Legislative

Representative Cody Harris filed House Bill 14, proposing the creation of TANEO and a $350 million nuclear development fund.
January 14th, 2025
NRC approves first new university research reactor in 30+ years
Regulatory

The Nuclear Regulatory Commission granted Abilene Christian University a construction permit for a molten salt research reactor — the first liquid-salt-fueled reactor licensed in American history and the first university research reactor approved in over three decades.
September 16th, 2024
NuScale's first SMR project cancelled in Idaho
Industry

NuScale Power and Utah Associated Municipal Power Systems terminated the Carbon Free Power Project after costs ballooned from $5.3 billion to $9.3 billion, casting doubt on SMR economics nationwide.
November 8th, 2023
Abbott directs creation of nuclear reactor working group
Policy

Governor Abbott directed the formation of the Texas Advanced Nuclear Reactor Working Group, assembling over 100 industry experts and stakeholders to explore nuclear power expansion.
August 1st, 2023
Winter Storm Uri exposes Texas grid fragility
Crisis

A catastrophic winter storm caused widespread power outages across Texas, killing hundreds and revealing critical vulnerabilities in the ERCOT grid. Nuclear plants, particularly the South Texas Project, performed relatively well compared to natural gas and wind generation.
February 15th, 2021

Scenarios

Texas becomes first state with operating advanced reactor

Discussed by: Department of Energy officials, X-energy leadership, Texas Nuclear Alliance

If the NRC approves Dow and X-energy's construction permit by late 2026 as the expedited timeline suggests, and TANEO funding accelerates supply chain development, the Seadrift plant could begin construction this decade with operations in the early 2030s. This would make Texas the first state to host a commercially operating advanced reactor, validating both the technology and the state investment model. The $1.2 billion in federal backing and an industrial customer in Dow reduce financial risk compared to utility-led projects.

Fund attracts a wave of new projects by deadline

Discussed by: TANEO officials, nuclear industry analysts

TANEO director Shaffer has acknowledged only two projects currently qualify, but the December 1, 2026 deadline allows applicants who 'reasonably expect' to have a docketed NRC application. Companies like Last Energy, Aalo Atomics, and Texas A&M's SMR initiative could file NRC pre-applications to meet this bar, expanding the eligible pool. If the fund attracts five or more serious applicants, it would signal that state-level investment can meaningfully accelerate the nuclear pipeline.

Cost overruns and delays repeat the NuScale pattern

Discussed by: Clean Air Task Force, Utility Dive analysts, nuclear skeptics

No advanced reactor design has yet reached commercial operation in the United States. The NuScale/UAMPS cancellation showed how quickly costs can spiral — from $5.3 billion to $9.3 billion — killing a project with federal support and NRC certification. If early TANEO-funded projects encounter similar escalation, the fund could exhaust its resources on designs that never produce power, discrediting both the technology and the state investment approach. Water scarcity in Texas adds an engineering constraint that could further inflate costs.

Other states replicate Texas model, triggering interstate competition

Discussed by: National Governors Association, Morgan Lewis energy practice, Nuclear Innovation Alliance

Tennessee has committed roughly $70 million to nuclear, Wyoming up to $150 million in matching funds, and Virginia has approved $122 million in utility cost recovery for SMR development. If Texas's fund successfully attracts projects, other states will likely escalate their own commitments, creating a competitive market for nuclear developers. This could accelerate deployment nationwide but also fragment a limited workforce and supply chain across too many simultaneous projects.

Historical Context

Georgia's Vogtle Units 3 & 4 (2009–2024)

2009–2024

What Happened

Georgia Power began building two new AP1000 reactors at Plant Vogtle, originally budgeted at roughly $14 billion. The project suffered years of delays, contractor bankruptcy (Westinghouse in 2017), and ballooning costs that ultimately reached approximately $35 billion. Unit 3 entered commercial operation in July 2023 and Unit 4 in April 2024 — the first new nuclear units built in the United States in over three decades.

Outcome

Short Term

Georgia ratepayers absorbed billions in cost overruns. Southern Company's stock and reputation took sustained hits during construction.

Long Term

Vogtle proved that new nuclear can still be built in the U.S. but raised hard questions about cost discipline. The experience intensified interest in smaller, simpler reactor designs that avoid Vogtle-scale construction risk.

Why It's Relevant Today

Texas's $350 million fund explicitly targets small modular and advanced reactors — designs meant to avoid the cost and schedule disasters that plagued Vogtle. Whether these designs actually deliver on that promise remains the central unanswered question.

NuScale UAMPS Carbon Free Power Project cancellation (2023)

November 2023

What Happened

NuScale Power and the Utah Associated Municipal Power Systems cancelled the Carbon Free Power Project, which would have been the first commercial small modular reactor in the United States. Despite NuScale holding the only NRC-certified SMR design, costs escalated 75% — from $5.3 billion to $9.3 billion — and municipal subscribers pulled out. The project collapsed without breaking ground.

Outcome

Short Term

NuScale's stock cratered and the company faced questions about viability. SMR skeptics pointed to the failure as evidence that small reactors cannot compete on cost.

Long Term

The cancellation shifted industry strategy away from utility consortium models toward industrial customers (like Dow) and behind-the-meter deployments for data centers — exactly the model Texas is now backing.

Why It's Relevant Today

TANEO's eligibility requirement of a docketed NRC application filters for projects further along than UAMPS ever was. But the core question — whether advanced reactors can be built at the costs their developers promise — remains open. Texas is betting $350 million that the answer is yes.

Texas Energy Fund for natural gas (2023)

2023

What Happened

In the 88th Legislature, Texas created the $5 billion Texas Energy Fund via HB 1500 and a constitutional amendment approved by voters. The fund provided low-interest loans to finance new natural gas power plants, motivated by the grid failures during Winter Storm Uri in February 2021 that left millions without power and killed hundreds.

Outcome

Short Term

The fund attracted proposals for several gigawatts of new gas-fired generation and signaled Texas's willingness to use state capital to shape its energy market.

Long Term

Established the template — state-capitalized energy fund administered through the Governor's office — that HB 14 explicitly replicates for nuclear.

Why It's Relevant Today

The nuclear fund directly follows the playbook Texas built for gas. The $350 million nuclear commitment is smaller than the $5 billion gas fund, but represents the same governing logic: if the deregulated ERCOT market won't build what Texas needs fast enough, the state will put up the money.