Agency Highlights

United States Environmental Protection Agency (EPA)

EPA and U.S. Army Corps of Engineers Issue Supplemental WOTUS Proposal. On September 9, 2026, EPA and the U.S. Army Corps of Engineers (the Agencies) published a supplemental notice of proposed rulemaking (SNPRM) to offer revised definitions for “waters of the United States” (WOTUS) under the Clean Water Act (CWA). The SNPRM builds upon the Agencies’ November 2025 proposed rule to revise CWA regulations in light of the Supreme Court’s 2023 ruling in Sackett v. EPA, 598 U.S. 651 (2023), which held that wetlands are subject to CWA jurisdiction only when they have a continuous surface connection to relatively permanent waters. In response to public comments on the November 2025 proposal concerning the legal vulnerability and practical difficulty of applying a “wet season” test, the SNPRM seeks to create bright-line definitions for “relatively permanent,” “perennial,” and “continuous surface connection.”

The November 2025 proposal defined “relatively permanent” to mean “standing or continuously flowing bodies of surface water that are standing or continuously flowing year-round or at least during the wet season.” However, this “wet season” test received public pushback as legally vulnerable and impractical for the average landowner to implement. Now, the SNPRM revises “relatively permanent” to mean “perennial bodies of water” and introduces a definition of “perennial” as “having standing or continuously flowing water every day of the year during ordinary conditions.” Importantly, a body of water does not lose its “relatively permanent” status if it dries up as the result of anomalous events such as drought or a dry spell or dries up for no more than a single period of up to 30 consecutive days in any given year due to non-anomalous events such as low tide or a regularly occurring dry spell. This revised definition is meant to provide transparency and establish a clear rule that excludes most intermittent and ephemeral features from the CWA.

The November 2025 proposal defined “continuous surface connection” to mean “having surface water at least during the wet season and abutting (i.e., touching) a jurisdictional water.” The SNPRM replaces this wet-season standard with a requirement for “perennial surface water in a wetland that is continuously connected with the surface water in the jurisdictional water such that it is difficult to determine where the jurisdictional water ends and the wetland begins.” The Agencies noted that only the portion of the wetland that is indistinguishably part of the jurisdictional water would be itself jurisdictional. The anomalous and non-anomalous event exceptions described above for “relatively permanent” would also apply here. This simplification allows landowners to evaluate jurisdiction independently through simple on-site observation, while significantly narrowing the scope of adjacent wetlands subject to CWA Section 404 permitting. Comments on the SNPRM closed on October 9, 2026.

EPA Rescinds Five Guidance Documents, Including 2022 NPDES PFAS Guidance. Following a systematic internal review, the EPA rescinded five guidance documents, including its 2022 NPDES wastewater guidance. The document provided state permitting authorities with model language to limit, monitor, and reduce per- and polyfluoroalkyl substances (PFAS) in industrial discharge permits. According to an August 11, 2026 rescission memorandum, the agency took this action as part of a broader deregulation initiative to eliminate confusion ahead of its plans to address PFAS contamination. While state-delegated CWA permitting authority remains intact, direct federal endorsement of state NPDES permit conditions has ended.

EPA Finalizes Rule to Repeal the 2024 Carbon Pollution Phase 2 Standards for Greenhouse Gas Emissions from Fossil Fuel-Fired Electric Generating Units. On September 14, 2026, the EPA issued a final rule to repeal several provisions of the 2024 Carbon Pollution Standards (2024 CPS) for greenhouse gas (GHG) emissions from fossil fuel-fired electric generating units (EGUs) based on the EPA’s reassessment of the best system of emission reduction (BSER) determinations under section 111 of the Clean Air Act (CAA) for subcategories of weighing cost, energy requirements, and other impacts. This final rule is to become effective on November 16, 2026.

This final rule repeals only the emission guidelines for existing fossil fuel-fired steam generating units, the carbon capture and sequestration/storage (CCS)-based standards for coal-fired steam generating units undertaking a large modification, and the CCS-based standards for new base load stationary combustion turbines (Phase 2 standards). The EPA concluded that CCS at a 90 percent level has not been adequately demonstrated, brings unreasonable costs, and provides a degree of emission limitation that is not achievable. The Agency also found that natural gas co-firing at a 40 percent level does not qualify as the BSER for existing medium-term coal-fired steam generating units, as this level gives rise to impermissible generation shifting under past results of the 2024 CPS. EPA’s consideration of BSER factors in CAA section 111(a)(1) found that natural gas co-firing in a steam generating unit is an inefficient use of natural gas, and it is unlikely that the necessary pipeline infrastructure can be deployed by the January 1, 2030 compliance date, and the EPA is finalizing the determination that the degree of emission limitation is not achievable. As a result, the EPA is repealing the requirements in the emission guidelines related to existing long-term and medium-term coal-fired steam generating units only.

The EPA in the final rule is seeking to address much of the regulatory uncertainty brought by the Agency’s prior attempts to regulate GHG emissions from fossil fuel-fired power plants under CAA section 111. The EPA first attempted to restrict GHG emissions from power plants in 2015, when the Agency issued both new source performance standards (NSPS) for new power plants (2015 NSPS) and emission guidelines for existing power plants (the Clean Power Plan (2015 CPP)). The U.S. Supreme court largely struck down these attempts in West Virginia v. EPA, ruling that CAA section 111 does not authorize the EPA to adopt a regulatory scheme that “cap[s] carbon dioxide emissions at a level that will force a nationwide transition away from the use of coal to generate electricity.” The EPA promulgated a new rule in 2024, expanding restrictions on certain new sources and regulating existing sources in a similar manner. The 2024 rule to regulate GHG emissions from the power sector included standards of performance for new and reconstructed fossil fuel-fired combustion turbines and for certain modified fossil fuel-fired steam generating power plants, as well as rules directing States to set standards of performance for existing fossil fuel-fired steam generating power plants. As a result, numerous States, regulated entities, and other stakeholders commented that the requirements are based on technologies that have not been adequately demonstrated, are unachievable, threaten to impose massive costs on the power sector, and do not adequately ensure the national interest in affordable, reliable electricity.

In the present final rule, the EPA has not repealed or otherwise revised the 2024 efficiency-based standards (Phase 1 standards) for new stationary combustion turbines. However, the EPA acknowledged prior comments and, to address those concerns, supplemented this final rule with a separate action published concurrently, issuing a Notice of Proposed Rulemaking (NPRM) to solicit additional public comment on whether the EPA lacks statutory authority to regulate GHG emissions from fossil fuel-fired power plants under CAA section 111. Whereas the primary proposal in the NPRM sought public comment on whether fossil fuel-fired EGUs “contribute significantly” to air pollution, the supplemental notice now seeks public comment on the distinct question whether global climate change concerns satisfy the threshold requirement in CAA section 111(b)(1)(A) that fossil fuel-fired power plant emissions contribute significantly to “air pollution which may reasonably be anticipated to endanger public health or welfare” as a predicate to regulating GHG emissions from those plants.

If the present supplemental action is finalized, it would effectively repeal all GHG standards for the fossil fuel-fired EGU source category under CAA section 111, including the 2024 efficiency-based standards in question. EPA believes this change will ensure affordable and reliable energy supplies and drive down the costs of transportation, heating, utilities, farming, and manufacturing while boosting national security.

Fifth Circuit Vacates EPA Rule Banning Nearly All Uses of Methylene Chloride Citing Agency Overreach of Authority. On September 15, 2026, a three-judge panel of the Fifth Circuit issued an opinion finding for Industry Petitioners in their challenge to vacate EPA’s 2024 final rule based on a 2022 revised risk evaluation to characterize methylene chloride (MC) as posing “unreasonable risk to human health” “as a whole chemical substance,” and prohibiting nearly all uses of the chemical. MC is a liquid chemical with carcinogenic qualities used as a solvent in consumer and commercial applications, and overexposure can cause injury and death.

The Fifth Circuit found that the EPA exceeded its authority under the Toxic Substances Control Act (TSCA) by aiming to remove any risk of exposure to MC, rather than curbing each “unreasonable risk” based on individual uses and economic impacts. In the holding, the court determined that the EPA erred when it considered MC “as a whole chemical substance,” rather than evaluating individual conditions of use for unreasonable risk, an interpretation the EPA itself had adopted in other regulations. The court also found that EPA published the rule on the assumption that workers who handle MC do not use personal protective equipment, a reversal from its previous assumptions and contrary to the available evidence. The court further stated that even if the EPA’s findings on unreasonable risk were sound, the Agency did not regulate only “to the extent necessary” as required by TSCA but sought to nearly ban the substance without considering whether there were available alternatives, or the economic feasibility and impact of the rule.

EPA Proposal on Minor Source Air Permits Draws Scrutiny Amid Data Center Debate. The EPA proposed changes to public participation requirements for Clean Air Act (CAA) permits issued to “minor” sources of air emissions. The proposal, signed by the EPA Administrator on July 1, concludes that the CAA does not require public notice and comment for minor new source review permits. EPA contends the focus is to let states exercise greater flexibility in simplifying their permitting processes. Those opposed to the rule changes (including Sierra Club and Public Citizen) argue that the changes would make it easier for data center developers to use diesel backup generators.

Texas Commission on Environmental Quality (TCEQ)

TCEQ Adopts Amendments and Rules for Renewable Energy Component Recycling Facilities. On September 9, 2026, the TCEQ approved adoption of amendments and rule changes to two chapters of Title 30 of the Texas Administrative Code (TAC). The action amended Section 37.931 of 30 TAC Chapter 37, concerning Financial Assurance, and added six new sections to 30 TAC Chapter 328, covering Waste Minimalization and Recycling.

These rules implement House Bill 3229 (89th Texas Legislature), setting forth reporting, recordkeeping, and financial assurance requirements for renewable energy component recycling facilities. The new requirements focus on the renewable energy component of recycling facilities that accept, process, and repurpose such components to recover valuable materials from a wind turbine generator, a solar energy device, or a battery energy storage system. The financial assurance requirements are intended to address situations in which a facility’s owner and operator fail to comply with proper disposal requirements.

Public Utility Commission of Texas (PUC)

CenterPoint Energy Houston Electric, LLC (CenterPoint) Files Application to Amend its Distribution Cost Recovery Factor (DCRF) Rider. On July 17, 2026, CenterPoint Energy Houston Electric, LLC (CenterPoint) filed an Application to Amend its Distribution Cost Recovery Factor (DCRF). This is CenterPoint’s second DCRF Application in 2026. In this filing, CenterPoint sought a DCRF revenue requirement, adjusted for load growth, of $352,318,850, which is an increase of $72,852,538 over what was approved in CenterPoint’s most recent DCRF proceeding. Gulf Coast Coalition of Cities (GCCC) and other stakeholders intervened and have actively participated in the review and discovery process. Multiple parties filed recommendations related to CenterPoint’s deferred costs for its System Resiliency Plan. The Administrative Law Judge issued a Proposal for Decision on September 14. More information can be found on the PUC’s Interchange in Docket No. 59981.

Oncor Electric Delivery Company LLC (Oncor) Unified Tracker Mechanism Application. On April 20, 2026, Oncor filed an application with the PUC for Approval of a Single Unified Tracker Mechanism (UTM)—the second annual proceeding of its kind under Public Utility Regulatory Act (PURA) § 36.216 following the passage of House Bill 5247. The UTM authorizes eligible utilities to file a single annual proceeding to adjust nonfuel rates on a system-wide basis to reflect changes in transmission and distribution invested capital. Oncor’s UTM consolidates and includes updates to its DCRF, interim transmission cost of service (TCOS), and transmission cost recovery factor (TCRF). Additionally, the DCRF portion of the filing includes deferred distribution costs related to Oncor’s implementation of its Commission-approved System Resiliency Plan. Overall, Oncor’s UTM seeks a cumulative revenue requirement increase of approximately $1 billion across its DCRF, TCOS, and TCRF.

The Steering Committee of Cities Served by Oncor (OCSC) and other stakeholders conducted discovery and filed direct testimony recommending adjustments to Oncor’s UTM. The parties thereafter convened for the hearing on the merits on August 20, 2026, and filed Initial and Reply Briefs. The Proposal for Decision is expected to be filed in November. More information can be found in Docket No. 59249.

Lone Star Transmission, LLC (Lone Star) Rate Case. On February 6, 2026, Lone Star filed a Statement of Intent and Application for Authority to Change Rates. In the Application, Lone Star sought approval of a total revenue requirement of $115,900,133, which represented a $5,785,530, or a 5.25%, increase over its current revenues. Lone Star also requested a 10.55% return on equity and a capital structure of 55% long-term debt and 45% equity.

OCSC and other stakeholders conducted discovery and filed direct testimony. The parties eventually reached a settlement agreement, which was filed on July 29, 2026. Under the settlement, the parties agreed that Lone Star would receive a total revenue requirement of $111,060,565, which will be reduced in the amount of $3.5 million in this case and in each of Lone Star’s interim TCOS proceedings filed after the effective date of this proceeding and prior to Lone Star’s next base rate case. Lone Star would also receive a 9.60% return on equity and capital structure of 55% long-term debt and 45% equity. The PUC has not approved the settlement yet but will be considering it at an upcoming Open Meeting. More information can be found in Docket No. 59245.

TNMP Files Unified Tracker Mechanism Application. On September 1, 2026, Texas-New Mexico Power Company (TNMP or Company) filed an application with the PUC for Approval of a Single Unified Tracker Mechanism (UTM). The UTM, which is authorized under PURA § 36.216, authorizes eligible utilities to file a single annual proceeding to adjust nonfuel rates on a system-wide basis to reflect changes in transmission and distribution invested capital. The UTM consolidates TNMP’s distribution cost recovery factor (DCRF), interim transmission cost of service, and transmission cost recovery factor. Additionally, the DCRF portion of the filing includes deferred distribution costs related to TNMP’s implementation of its Commission-approved System Resiliency Plan.

Overall, TNMP’s UTM seeks a cumulative increase in its transmission and distribution revenue requirements of at least $600 million on the heels of the utility receiving in August a net $4.5 million increase in its total base rate revenue requirement. Cities Served by TNMP (Cities) and stakeholders have intervened and are conducting discovery while preparing their direct testimony. More information can be found in Docket No. 59944.

Electric Transmission Texas, LLC (ETT or Company) Rate Case. On April 20, 2026, ETT filed a Statement of Intent and Application for Authority to Change Rates. ETT requested a total revenue requirement of approximately $439.9 million, or a 10.6% increase over its current revenues. ETT also requested a 10.5% return on equity and a capital structure of 55% long-term debt and 45% equity. OCSC and other stakeholders reviewed the application and conducted discovery.

On August 25, 2026, parties filed an Unopposed Stipulation and Settlement Agreement (Agreement). The parties agreed that ETT’s total revenue requirement be set at $404.8 million, which is a decrease of approximately $34.5 million when compared to Company’s request. Additionally, the Agreement proposes maintaining a regulatory capital structure of 59% debt and 41% equity and authorized return of equity of 9.6%. The PUC has not approved the settlement yet. The settlement agreement can be found in Docket No. 59642.

PUC Rulemaking Update. In January 2026, PUC Staff updated its calendar to reflect projected rulemaking timelines for the 2026 year. The calendar is a robust list of projects covering changes to the PUC’s electric and water rules. The 2026 calendar can be found on the PUC’s interchange under Docket No. 59212.

• As of September 21, 2026, the following rulemakings are in progress:
• Project No. 58482 – Rulemaking to Develop Reliability Service to Competitively Procure Demand Reductions from Large Load under PURA 39.170
• Project No. 59086 – Implementation of HB 2712 (89R) – Future and Combined Test Years (Water and Sewer)
• Project No. 59523 – Implementation of PURA 35.153 – TDU and PGC Contracts for Electric Energy Storage Facility Capacity
• Project No. 59557 – Streamlined Complaint Process
• Project No. 54233 – Technical Requirements and Interconnection Processes for Distributed Energy Resources (DERS)
• Project No. 59432 – Transmission and Distribution Pole Structural Integrity and Service Quality Standards
• Project No. 59288 – Review of §25.107
• Project No. 53981 – Review of Wholesale Water and Sewer Rate Appeals

• The following rulemakings since the publication of the 2026 rulemaking calendar have been completed and new rules are in effect:
• Project No. 58480 – Rulemaking to Establish Large Load Criteria Forecasting Criteria PURA 37.0561
• Project No. 58434 – Rulemaking for Firm Fuel Supply
• Project No. 58400 – CY2025 Updates to Chapter 22 – Procedural Rules, Subchapters A-F
• Project No. 58401 – CY2025 Updates to Chapter 22 – Procedural Rules, Subchapters G-J
• Project No. 58402 – CY2025 Updates to Chapter 22 – Procedural Rules, Subchapters K-O
• Project No. 58392 – Implementation of SB 231 (89R) – Temporary Emergency Electric Energy Facilities
• Project No. 58391 – Implementation of SB 740 (89R) – System Improvement Charge
• Project No. 57883 – Commission Directives to ERCOT
• Project No. 58479 – Rulemaking for Net Metering Arrangements Involving a Large Load Co-Located with an Existing Generation Resource under PURA 39.169
• Project No. 59042 – Texas Energy Fund – Texas Backup Power Package Program
• Project No. 59332 – Review of §§ 24.245 and 24.259
• Project No. 59431 – Distribution Pole Management and Inspection Plans
• Project No. 58481 – Rulemaking to Implement Large Load Interconnection Standards Under PURA 37.0561

Railroad Commission of Texas (RRC)

SiEnergy Gas, LLC (SiEnergy or Company) Rate Case. On May 4, 2026, SiEnergy filed a Statement of Intent to change gas rates within the incorporated areas served by SiEnergy and a notice of intent to consolidate its operations and assets with the other members of SiEnergy Holding, LLC, otherwise known as Pines Gas Development, Inc. and Pines Gas, Inc. (collectively, the “Pines Entities”). Contemporaneous with this filing, SiEnergy filed a similar Statement of Intent with the RRC for the unincorporated areas of its service areas.

In the filing, SiEnergy sought approval of a total revenue requirement on a system-wide basis of $61.9 million, representing a $12 million increase in SiEnergy’s aggregate revenues or a 16.1% increase including gas costs and 24.0% excluding gas costs. The Company also requested a 10.75% return on equity and a capital structure of 40% long-term debt and 60% equity. Current SiEnergy customers would also see an increase in the existing Residential customer charge from $19.25 to $24.75 and the existing General Service Small customer charge from $42.50 to $70.00.

The Cities Served by SiEnergy and other stakeholders conducted discovery and filed direct testimony. The parties eventually reached a settlement agreement, which was filed on September 22, 2026. The parties agreed that SiEnergy’s revenue requirement be set at $58,579,292, which is a reduction of approximately $3.3 million from the Company’s initial request. The parties also agreed that SiEnergy should receive a capital structure of 40.25% debt and 59.75% equity and a return on equity of 9.8% and that the Commission should approve the consolidation of SiEnergy with the Pines Entities. The parties also agreed that SiEnergy will maintain its Residential and General Service Small customer charges at $19.25 and $42.50. The RRC has not approved the settlement yet. More information can be found in Docket No. OS-26-00031317.

“Agency Highlights” is prepared by Bryan Garcia in the Firm’s Districts and Water Practice Groups; Geno Albini in the Firm’s Air and Waste Practice Group; Jack Klug in the Firm’s Energy and Utility Practice Group; Ace Dantzler-Woodruff in the Firm’s Energy and Utility Practice Group; Roslyn Warner in the Firm’s Energy and Utility Practice Group; and Samantha Miller 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 Bryan at 512.322.5815 or bgarcia@lglawfirm.com, or Geno at 512.322.5868 or galbini@lglawfirm.com, or Jack at 512.322.5837 or jklug@lglawfirm.com, or Ace at 512.322.5885 or adantzler-woodruff@lglawfirm.com or Roslyn at 512.322.5802 or rwarner@lglawfirm.com, or Samantha at 512.322.5808 or smiller@lglawfirm.com.