The Department of Energy (DOE) prepared this Environmental Assessment (EA) to evaluate the potential environmental consequences of providing a financial assistance grant under the American Recovery and Reinvestment Act of 2009 (Recovery Act; Public Law 111-5, 123 Stat. 115) to the Thermal Energy Corporation to facilitate installation of a combined heat and power system (CHP), water chillers, and cooling tower at a district power plant that supplies the energy, heating, and cooling needs of the Texas Medical Center campus in Houston, Harris County, Texas. This EA analyzes the potential environmental consequences of DOE's Proposed Action to provide the Recovery Act grant, Thermal Energy Corporation's proposed project of installing and operating a CHP system, and the No-Action Alternative. In this EA, DOE evaluated in detail potential impacts to air quality, sound levels, water resources, health and safety, and socioeconomics. After performing a screening analysis of other environmental resource areas, DOE concluded that impacts to other aspects of the environment would not be likely to occur or would not be detectable. The proposed project would be designed and operated in compliance with federal and Texas air quality regulations, reduce greenhouse gas emissions, and have a net beneficial impact on air quality in the region. Operation of the CHP system would cause a small increase in noise outdoors near the adjacent medical facilities. Installation of the CHP system in a floodplain would not adversely impact natural and beneficial floodplain values or increase risks to lives or property. The project would have no or only small impacts to surface water quality and future availability of potable water in the Houston area, and would not cause significant hazards to workers or the public at the Central Plant. Manufacturing and installation of the equipment would result in a minor to moderate, temporary beneficial impact to the economy. Incremental increase in cumulative impacts from the proposed project, relative to impacts from other activities in the surrounding area, would be negligible to small.