Agency Highlights

United States Environmental Protection Agency (“EPA”)

EPA to Maintain PFOA and PFOS Hazardous Substances Designations. Shortly after two PFAS, PFOA and PFOS were listed as hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA,” also known as Superfund) in 2024, various industry leaders filed suit against the designation, questioning whether 1) the EPA’s interpretation of regulations was correct regarding retroactive liability, 2) the EPA correctly interpreted the Act, 3) the EUPA should have considered cost associated with the new rule, 4) the EPA provided an adequate notice and comment period, and 5) the rule was arbitrary and capricious. While the case was put on hold during the change in administration, the EPA announced in September 2025 that it had reviewed the rule and decided to leave it in place. As such, it has since requested briefing to resume, while also re-asserting that it will continue to make efforts to codify certain exceptions for passive receivers such as publicly operated treatment works and municipal solid waste landfills. Chamber of Commerce of the USA, et al. v. EPA, et al., No. 24-1193 (D.C. Cir.).

EPA Proposes to Rollback Hydrofluorocarbon (“HFC”) Ban Deadline. On September 30, 2029, the EPA proposed a rule to extend the compliance deadline and make other revisions to the 2023 rule banning HFCs in refrigerators, air conditioners, and heating products when more climate friendly alternatives are available. Specifically, if passed, this rule would, among other things: (1) raise the global warming potential threshold for (i) cold storage warehouses from 150 or 300, as applicable, to 700 and (ii) supermarket systems from 150 or 300, as applicable, to 1,400; and (2) shift the compliance deadline for many sectors including residential air conditioning and cold storage warehouses from January 2026 and 2028, as applicable, to January 2030. This rule is published at 90 F.R. 47999, and comments are due before November 17, 2025.

EPA Proposes to End Green House Gas (“GHG”) Reporting. On September 22, 2025, the EPA proposed a rule to remove GHG reporting requirements for most source categories, which covers more than 8,000 industrial facilities. The only sector that would still be required to collect and submit data is Petroleum and Natural Gas Systems covered by Subpart W of 40 C.F.R. Part 98. However, that is proposed be suspended until 2034. If passed, this proposal may not, however, prevent private companies from continuing to collect GHG data independently. The data collected from this program has historically been utilized to help develop air emission rules for oil and natural gas facilities and municipal solid waste landfills. As such, the EPA is currently developing an update to municipal solid waste landfill emission rules. This rule is published at 90 F.R. 44591, and comments are due before November 3, 2025. A public hearing was held on October 1, 2025.

Public Utility Commission of Texas (“PUC”)

AEP Texas, Inc. (“AEP”) Application to Amend Mobile Temporary Emergency Electric Energy Facilities (“TEEEF”) Rider. As previously reported, AEP filed an Application to Amend its Rider Mobile TEEEF. Under the Public Utility Regulatory Act, a transmission and distribution utility may lease and operate facilities that provide temporary electric energy to distribution customers during a significant outage. A utility may recover the reasonable and necessary costs of leasing and operating these facilities through a TEEEF Rider.

In its Application, AEP sought a total Rider Mobile TEEEF revenue requirement of $36.2 million. AEP Cities and other parties intervened and reviewed AEP’s request. After multiple settlement discussions, a settlement was reached. Filed on August 22, 2025, the settlement reduced AEP’s requested Rider Mobile TEEEF revenue requirement to $24.2 million. This is a $12 million reduction from AEP’s initial request. The PUC has not approved the settlement and will be considering the settlement at an upcoming Open Meeting. The settlement agreement can be found on the PUC’s Interchange in Docket No. 58076.

Energy Efficiency Cost Recovery Factor (“EECRF”). Pursuant to the Public Utility Regulatory Act and the PUC Rules, a utility must establish an EECRF that allows it to recover the reasonable costs of providing a portfolio of cost-effective energy efficiency programs. A utility must file an application annually with the PUC to adjust its EECRF in order to recover the utility’s forecasted annual energy efficiency program expenditures, the preceding year’s over- or under-recovery including interest and municipal and utility EECRF proceeding expenses, any performance bonus earned, and evaluation, measurement, and verification contractor costs allocated to the utility by the Commission for the preceding year.

On May 30, 2025, three investor-owned utilities filed their EECRF applications: AEP Texas, Inc. (“AEP Texas”); Oncor Electric Delivery Company LLC (“Oncor”); and CenterPoint Energy Houston Electric, LLC (“CenterPoint”). In its EECRF application, AEP Texas requested authority to update its EECRF to collect $29,572,509 in 2026, consisting of: (1) forecasted energy-efficiency program costs of $18,859,458 for program year 2026; (2) Evaluation, Measurement and Verification expenses of $254,234 for the evaluation of program year 2025; (3) an adjustment of $431,959 to account for the under-recovery of program year 2024 energy efficiency costs, including interest in the amount of $40,792 and recovery of 2024 EM&V costs; (4) recovery of $10,006,302 representing AEP Texas’ earned performance bonus for achieving demand and energy savings that exceeded its minimum goals for program year 2024; and (5) rate case expenses of $20,556 incurred by AEP Texas in Docket No. 56553. Commission Staff conducted discovery and recommended approval of AEP Texas’ application with minor adjustments, and the Sierra Club filed direct testimony. All parties have reached a settlement in principle. More information can be found on the PUC’s Interchange in Docket No. 58156.

In its EECRF application, CenterPoint requested to recover a total of $95,837,175 through its Rider EECRF in 2026, which consists of: (1) estimated 2026 energy efficiency program costs of $50,155,355; (2) a performance incentive for 2024 program achievements of $40,313,445; (3) $576,924 for 2026 EM&V expenses assigned to AEP Texas by Commission Staff; (4) a charge of $4,298,232 related to the under-recovery of 2024 program costs; (5) a credit of $448,229 for the interest related to the under-recovery; and (6) $44,990 in 2024 EECRF proceeding expenses. A settlement has not been reached and a final order has not been filed. More information can be found on the PUC’s Interchange in Docket No. 58185.

In its EECRF application, Oncor requested recovery of $104,807,363, consisting of: (1) $63,800,000 in energy efficiency expenses forecasted for the 2026 program year; (2) allocation of $7,622,221 for the total under-recovery of 2024 energy efficiency costs that includes the required interest payment; (3) inclusion of a $32,560,930 energy efficiency performance bonus based on Oncor’s energy efficiency achievements in 2024; and (4) $816,517 for the estimated EM&V costs for the evaluation of program year 2025. Commission Staff conducted discovery, and the parties (including the Steering Committee of Cities Served by Oncor) have reached a settlement in principle. More information can be found on the PUC’s Interchange in Docket No. 58182.

On June 27, 2025, Texas-New Mexico Power Company (“TNMP”) filed its EECRF application requesting $8,136,795, consisting of: (1) $6,656,727 in energy efficiency expenses forecasted for the 2026 program year; (2) inclusion of a $2,518,347 energy efficiency performance bonus; (3) $57,178 in EM&V expenses for 2026; (4) a refund of $992,009 for over collection in 2024; and (5) a reduction of $103,449 related to interest on over collection. Commission Staff conducted discovery and filed direct testimony. On August 8, 2025, TNMP and Commission Staff filed a settlement agreement which resolves all issues among them. More information can be found on the PUC’s Interchange in Docket No. 58140.

Texas-New Mexico Power Company (“TNMP”) and CenterPoint Energy Houston Electric, LLC (“CenterPoint”) File Application to Amend Distribution Cost Recovery Factor (“DCRF”) Riders. On July 31, 2025, Texas-New Mexico Power Company (“TNMP”) filed an Application to Amend its Distribution Cost Recovery Factor (“DCRF”). This is TNMP’s second DCRF Application in 2025. In the filing, TNMP sought approval for distribution revenues of $102.7 million. This is an incremental increase of approximately $5.3 million. Included in these costs are TNMP’s system resiliency plan related costs. In 2023, the Legislature created system resiliency plans as an alternative mechanism for transmission and distribution utilities to recover “system resiliency” related costs. TNMP is the second utility to request recovery of these costs through a DCRF.

Cities Served by TNMP and other stakeholders have intervened and requested discovery regarding the system resiliency related costs and other aspects of TNMP’s DCRF. Cities Served by TNMP challenged TNMP’s request related to a regulatory asset that includes the system resiliency costs. Parties participated in settlement discussions; however, a settlement was not reached. Cities Served by TNMP and another city coalition jointly filed a Proposed Order opposing TNMP’s Proposed Order reflecting approval of its request. Ultimately, the Administrative Law Judge included TNMP’s Proposed Order in its Proposal for Decision recommending the PUC approve TNMP’s request.

On October 22, 2025, Chairman Gleeson filed a memorandum, which recommended the Proposal for Decision be approved in part and denied in part. Chairman Gleeson recommended various modifications related to the system resiliency related costs such as extending the amortization period, ensuring the costs are not treated as distribution invested capital, and adjusting the requested weighted average cost of capital to be used to determine carrying costs on the regulatory asset. The PUC approved an Order consistent with Chairman Gleeson’s memorandum at the October 23, 2025 Open Meeting. PUC Staff will recalculate the resulting DCRF rate under the new Order. A signed Final Order should be filed by the PUC soon. More information can be found on the PUC’s Interchange in Docket No. 58468.

CenterPoint Energy Houston Electric, LLC (CenterPoint) also filed its second Application to Amend its DCRF in 2025. Filed on August 15, 2025, CenterPoint’s Application seeks approval for distribution revenues of $178.1 million. This is an incremental increase of approximately $55.4 million. Unlike TNMP’s DCRF, CenterPoint does not include the recovery of its system resiliency plan related costs. This is due to the fact that the PUC has not made a final decision on CenterPoint’s system resiliency plan. Cities and other stakeholders have intervened and requested discovery regarding other aspects of CenterPoint’s DCRF. One intervening party filed testimony recommending adjustments to the request. No settlement was reached, and the PUC filed an Order approving CenterPoint’s Application. More information can be found on the PUC’s Interchange in Docket No. 58537.

CenterPoint Files Application Seeking Approval to Recover its System Restoration Costs Related to Hurricane Beryl, Hurricane Francine, and Winter Storm Enzo. On May 2, 2025, CenterPoint Energy Houston Electric, LLC (CenterPoint) filed an Application for a determination by the PUC that its Hurricane Beryl, Hurricane Francine, and Winter Storm Enzo system restoration costs (SRCs) were reasonable and necessary. Under the Public Utility Regulatory Act, a utility is able to recover its reasonable and necessary SRCs, including costs for mobilizing, staging, construction, reconstruction, replacement, or repair of electric generation, transmission, distribution, or general plant facilities in order to restore service and infrastructure associated with electric power outages affecting the utility’s customers as a result of weather-related events and natural disasters.

In its Application, CenterPoint requested SRCs totaling $1.3 billion. The impact of CenterPoint’s request is a $2.13 increase to a typical residential customer’s monthly bill. Multiple stakeholders intervened, including Gulf Coast Coalition of Cities, and participated in the evaluation of and conducted discovery on the Application. On July 1, 2025, intervening parties filed direct testimony recommending adjustments to the Application that reflect parties’ concerns with the reasonableness of CenterPoint’s SRCs. Intervening parties, PUC Staff, and CenterPoint participated in mediation, and ultimately came to a settlement. The settlement resulted in a $22 million reduction, and deferral of $78 million related to a pole and feeder issue. The deferral will allow parties to seek further information and evaluate the requested dollars at a different time. The settlement agreement was filed on August 14, 2025, and the PUC filed a Final Order approving the settlement agreement on October 23, 2025. More information can be found on the PUC’s Interchange in Docket No. 58028.

Application of Cross Texas Transmission, LLC (“CTT” or “Cross Texas”) for Authority to Change Rates and Tariffs. As previously reported, CTT filed a statement of intent to change rates and tariffs on January 14, 2025, where it sought a revenue requirement of $76,506,194, representing an approximately 7.05% increase over its currently approved revenue requirement. Cross Texas also asked for a return on equity (“ROE”) of 10.60%, cost of debt of 3.94%, and CTT’s actual capital structure of 55.07% debt and 44.93% equity, which results in a weighted average cost of capital of 6.93%. The Steering Committee of Cities Served by Oncor and other stakeholders conducted discovery and filed testimony. After discussions with Cross Texas and the other parties, all parties reached a settlement agreement resulting in a revenue requirement of $72,631,149, ROE of 9.60%, cost of debt of 3.94%, capital structure of 59% debt and 41% common equity, and overall rate of return of 6.26%. The Commission approved the rates, terms, and conditions set forth in the settlement agreement on September 11, 2025. More information can be found under PUC Docket No. 57467.

PUC Rulemaking Update. In September 2025, PUC Staff updated its calendar to reflect projected rulemaking timelines for the last few months of 2025. The calendar is a robust list of projects covering changes to the PUC’s electric and water rules. The updated calendar can be found on the PUC’s Interchange under Docket No. 57606. PUC Staff is prioritizing several developments arising out of the 89th legislative session, particularly with regard to Senate Bill 6 addressing large load interconnections.

As of September 19, 2025, the following rulemakings are in progress:

• Project No. 58198 – Rulemaking to Implement Firming Reliability Requirements for Electric Generating Facilities in the ERCOT Region under PURA § 39.1592
• Project No. 58392 – Implementation of SB 231 (89R) Temporary Emergency Electric Energy Facilities
• Project No. 58393 – Annual Report on Dispatchable and Non-Dispatchable Generation Facilities
• Project No. 58436 – Implementation of HB 3476 (87R) – CCN Standards for Water and Sewer Utilities Within the Extraterritorial Boundaries of a Municipality
• Project No. 56789 – Transmission and Distribution Wildfire Mitigation Plans and Self-Insurance Plans
• Project No. 57928 – Review of § 25.53, Electric Service Emergency Operations Plans
• Project No. 58390 – Implementation of SB 1965 (88R) and SB 740 (89R) – Expedited Water STMs
• Project No. 58379 – Review of § 25.504 – Wholesale Market Power in the ERCOT Region
• Project No. 57743 – Review of Energy Efficiency Rules
• Project No. 58479 – Rulemaking for Net Metering Arrangements Involving a Large Load Co-Located with an Existing Generation Resource Under PURA § 39.169 Large Load Forecasting Criteria
• Project No. 58391 – Implementation of SB 740 (89R) – System Improvement Charge
• Project No. 58402 – CY2025 Updated to Chapter 22 – Procedural Rules, Subchapters K-O
• Project No. 56736 – Retail Sales Report
• Project No. 57883 – Commission Directives to ERCOT
• Project No. 52059 – Review of Commission Filing Requirements
• Project No. 58211 – ERCOT Standard Generation Interconnection Agreement (SGIA)
• Project No. 58434 – Rulemaking for Firm Fuel Supply Service
• Project No. 56199 – Review of Distribution Cost Recovery Factor
• Project No. 58210 – Review of §§ 25.235-.237 – Interim Fuel Adjustments for Utilities Outside of ERCOT
• Project No. 57999 – Review of Chapter 25, Substantive Rules Applicable to Electric Service Providers Under the Administrative Procedure Act § 2001.039
• Project No. TBD – Simplified Customer Complaint Process (Water) – SB 790
• Project No. TBD – TEF Backup Power Package
• Project No. TBD – T&D Pole Standards – SB 1789
• Project No. TBD – Future Test Year – HB 2712

The following rulemakings provided in our last newsletter remain ongoing:

• Project No. 52301 – ERCOT Governance and Related Issues
• Project No. 54233 – Technical Requirements and Interconnection Processes for Distributed Energy Resources
• Project No. 56574 – Rule Review for Chapter 22 – Procedural Rules
• The following rulemakings provided in our last newsletter have since been completed and new rules are in effect:
• Project No. 57603 – Unplanned Generation Service Interruption Reporting
• Project No. 57374 – Exemption Process for ERCOT Technical Standards
• Project No. 57602 – Permian Basin Reliability Plan Reporting Requirements and Monitor
• Project No. 57819 – CCN Mapping Resources Webpage Attestation Requirement

Texas Railroad Commission (“RRC”)

Texas Gas Service Company, a Division of One Gas, Inc. (“Texas Gas”) Files its Statement of Intent to Change Gas Utility Rates. On June 30, 2025, Texas Gas Service Company, a Division of One Gas, Inc. (“Texas Gas”) filed its Statement of Intent to Change Gas Utility Rates with the cities in Texas Gas’ Central-Gulf, West North, and Rio Grande Valley Service Areas, as well as with the RRC. In its Application, Texas Gas sought approval to consolidate all of its service areas into a single statewide jurisdiction. Texas Gas’ proposed rates for all of its customers are based on a system-wide cost of providing service to customers throughout the entirety of Texas. Texas Gas further proposed to increase revenues by $41.1 million.

Cities Served by Texas Gas Service is among the multiple coalitions of cities that have intervened in the case filed with the RRC. Parties have begun their evaluation of the Application and requested discovery on different aspects of the Application. Settlement discussions are ongoing. More information can be found on the RRC’s website in GUD Case No. OS-25-00028202.

“Agency Highlights” is prepared by Toni Rask in the Firm’s Water Practice Group; Mattie Neira in the Firm’s Air and Waste Practice Group; and Jack Klug in the Firm’s Energy and Utility Practice Group. If you would like additional information or have questions related to these agencies or other matters, please contact Toni at 512.322.5873 or trask@lglawfirm.com, or Mattie at 512.322.5804 or mneira@lglawfirm.com, or Jack at 512.322.5837 or jklug@lglawfirm.com.