HB 5247

relating to alternative capital recovery process for certain
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Subchapter E, Chapter 36, Utilities Code, is
amended by adding Section 36.2101 to read as follows:
Sec. 36.2101.  SINGLE CAPITAL INVESTMENT PROCEDURE FOR
CERTAIN UTILITIES.  (a)  This section applies to an electric
utility, other than a river authority, that:
(1)  operates solely inside ERCOT;
(2)  is constructing transmission as part of a
reliability plan approved by the commission under Section 39.167;
(3)  before September 1, 2025, and in the prior
calendar year made total capital expenditures in excess of 300% of
(b)  An electric utility under Subsection (a) may elect to
file a single annual proceeding on a system-wide basis to adjust
non-fuel rates to reflect changes in transmission and distribution
invested capital in lieu of adjustments to retail and wholesale
transmission and distribution rates authorized under Sections
36.210 and 38.078 and under rules adopted by the commission under
(c)  An electric utility making an election under this
section shall utilize the filing requirements adopted by the
commission for the adjustment proceedings referenced by Subsection
(1)  the utility may defer all or a portion of the
costs, including depreciation expense and carrying costs,
associated with the transmission and distribution invested capital
at the utility's weighted average cost of capital established in
the commission's final order in the utility's most recent base-rate
proceeding for invested capital, as described by Section 36.053,
not currently reflected in the utility's rates for recovery as a
regulatory asset.  The commission shall include the regulatory
asset in rates set under this section and shall authorize
amortization of the asset over a period not to exceed 12 months,
unless such recovery period would cause the utility to earn in
excess of its authorized return on investment as normalized for
weather, in which case the commission shall authorize a longer
(2)  the utility may update the allocation of costs
among customer classes to reflect customer growth.
(d)  The commission shall approve an adjustment under this
section not later than the 120th day after the date the request is
(1)  The electric utility shall provide notice to
retail electric providers of the approved rates not later than the
45th day before the date the rates are effective.
(2)  If the commission does not issue a final order
before the deadline under Subsection (d), the electric utility may
place the requested rates into effect on a temporary basis no
earlier than the 165th day after filing the request, provided that
the utility provides notice of its intention to place the temporary
rates into effect to retail electric providers not later than the
45th day before the date the rates take effect.  The utility shall
refund or credit against future bills any difference between the
temporary rate and the final rate along with interest at the current
interest rate as determined by the commission.
(e)  An electric utility making an election under this
section may not petition for another adjustment under this section,
an adjustment under Sections 36.210, 38.078, or an adjustment under
the commission's rules to implement Section 35.004 for a period of
12 months after the date the utility filed the request under
(f)  Nothing in this section is intended to:
(1)  conflict with a provision of a financing order
issued under Subchapter I of this chapter;
(2)  affect the limitation on the commission's
jurisdiction under Section 32.002;
(3)  limit the jurisdiction of a municipality over the
rates, operations, and services of an electric utility under
Section 33.001 or limit the ability of a municipality to obtain a
reimbursement under Section 33.023; or
(4)  prevent the commission from:
(A)  reviewing the investment costs included in an
adjustment under this section in the electric utility's next
comprehensive base-rate proceeding to determine whether the costs
were prudent, reasonable, and necessary; or
(B)  refunding to customers any amount improperly
recovered through an adjustment under this section, with
SECTION 2.  As soon as practicable after the effective date
of this Act, the Public Utility Commission of Texas shall adopt
rules necessary to implement the changes in law made by this Act.
SECTION 3.  This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution.  If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2025.