Now What? Implementation of Electric And Utility Bills From The 89th Legislative Session

by Roslyn M. Warner, R.A. “Jake” Dyer, and Jack M. Klug

During the Texas Legislature’s 89th regular session, lawmakers filed more than 250 bills relating to electric and gas utility matters. Of the smaller subset of these bills that made it past the finish line, several must now be expanded upon in rulemaking proceedings at state agencies. Meanwhile, other new laws from the 88th session are still undergoing agency implementation. Below we highlight ongoing and recently completed electric and gas utility rulemakings at the Public Utility Commission (“PUC”) and the Railroad Commission (“RRC”).

HB 145 by Rep. Ken King relates to wildfire mitigation plans for electric utilities. On November 14, 2025, the PUC adopted new 16 Tex. Admin. Code § 25.60 and amended existing 16 Tex. Admin. Code § 25.231 to implement this new legislation.

The new rules will require each electric utility, municipally owned utility, and electric cooperative that owns a transmission or distribution facility in a wildfire risk area to seek PUC approval of a wildfire mitigation plan and subsequently implement the plan. The PUC additionally modified criteria and conditions related to electric utilities’ use of self-insurance reserve funds for damages from a wildfire event. The new rule took effect on December 4, 2025. More information is available on the PUC Interchange under Project No. 56789.

HB 4384 by Rep. Drew Darby relates to a gas utility’s recovery of certain costs for plant, facilities, or equipment placed in service. In late September 2025, RRC Staff proposed new 16 Tex. Admin. Code § 7.7102 to implement the new law. Stakeholders filed comments with RRC Staff in mid-November. HB 4384 will reduce the lag time between when a gas utility spends money on capital projects and when the utility profits on such expenditures by recovering them in rates. RRC Staff’s draft rule largely tracked the statutory language in laying out the process for utilities to seek recovery of these expenses in a regulatory asset. City and utility stakeholders filed comments on the proposed rule. The final rule has not yet been published.

SB 6 by Sen. Phil King and Sen. Charles Schwertner was a significant multi-faceted piece of utility legislation from the 89th session. The PUC divided the necessary rulemakings into different projects based on sections of the bill.

Under Section 4 of SB 6, large loads (75 megawatts (“MW”) or greater) co-locating behind the meter with new generation resources are required to file a net-metering plan with ERCOT. The PUC approved a Proposal for Publication relating to net metering arrangements on September 18, 2025, and stakeholders filed comments throughout October. Proposed 16 Tex. Admin. Code § 25.205 will apply to net metering arrangements involving a large load and an existing generation resource. The rule will also establish criteria for ERCOT’s study of a proposed net metering arrangement and prescribe certain procedural steps. More information is available on the PUC Interchange under Project No. 58479.

Section 2 of SB 6 calls for the establishment of criteria for ERCOT to forecast peak demand for large loads. The ERCOT forecast would then be used for transmission planning and evaluation of resource adequacy. The PUC approved a Proposal for Publication relating to large load forecasting criteria on September 18, 2025, and stakeholders filed comments throughout October. Proposed 16 Tex. Admin. Code § 25.370 will identify the criteria a large load customer must satisfy to be included in the load data submitted to ERCOT for developing the load forecasts contemplated under the new law. More information is available on the PUC Interchange under Project No. 58480.

A third SB 6 rulemaking focuses on reevaluation of the Four Coincident Peak (“4CP”) methodology of transmission cost allocation. The 4CP methodology was intended to equitably allocate transmission costs to those who impact system-wide peak demand the most. Any changes to the 4CP methodology could shift transmission cost responsibility among classes of market participants. Since August 2025, PUC Staff has issued multiple sets of questions for stakeholder input under Project No. 58484. While many respondents recognize a need to modify the 4CP methodology, there appears to be little consensus on the most appropriate method for the PUC to adopt.

Another SB 6 rulemaking focuses on establishing standards for interconnecting large load customers in the ERCOT power region in a manner designed to support business development in this state while minimizing the potential for stranded infrastructure costs and maintaining system reliability. The rule will also ensure that a large load customer who is subject to the standards adopted under PURA § 37.0561 contributes to the recovery of the interconnecting electric utility’s costs to interconnect the large load to the utility’s system. This rule is anticipated to be in place by July 2026. More information is available on the PUC Interchange under Project No. 58481.

A final SB 6 rulemaking relates to the PUC requiring ERCOT to develop a reliability service to competitively procure demand reductions from large load customers with a demand of at least 75 MWs to be deployed in the event of an anticipated emergency condition. No filings have been made yet related to this rulemaking, but more information will be available on the PUC Interchange under Project No. 58482.

SB 231 by Sen. Phil King reforms a pre-existing statute related to Temporary Emergency Electric Energy Facilities, known as “TEEEF” or colloquially referred to as “mobile generation.” Throughout September 2025, PUC Staff elicited initial and reply comments on proposed amendments to 16 Tex. Admin. Code § 25.56 under Project No. 58392. The draft rule focused on incorporating new guardrails from the amended law, including the process for PUC approval and parameters around mobility, boot-up time, and maximum generating capacity. As of the end of 2025, no final Proposal for Adoption had been published, but we can expect PUC consideration of a final draft rule in the coming months.

In addition to the above rulemakings arising out of the 89th session, the PUC used the latter half of 2025 to continue implementing new and modified laws from the 88th session. Of note is implementation of HB 1500 filed by several authors and known as the 2023 Sunset bill. One key feature of HB 1500 was the requirement for renewable resources interconnected after January 1, 2027, to be available during certain high risk and emergency intervals. On December 18, 2025, the PUC adopted Firming Program Requirements for Electric Generation Facilities in the ERCOT Region under new 16 Tex. Admin. Code § 25.65. In addition to establishing electric generation performance requirements, the rule establishes a framework for ERCOT to impose financial penalties and incentives depending on a generation facility’s failure to comply or success in exceeding requirements. There continues to be discussion on how these requirements may interact with other legislative direction on electric market changes. The rule took effect on January 8, 2026. More information is available on the PUC Interchange under Project No. 58198.

HB 1500 additionally teed up a rulemaking on PUC verbal directives requiring ERCOT to take an official action. Proposed new 16 Tex. Admin. Code § 25.368 is meant to codify a statute that prohibits the PUC from verbally directing ERCOT to take an official action – except under limited circumstances. By law, the PUC may direct ERCOT to take an official action only through (1) a contested case; (2) a rulemaking; or (3) a memorandum or written order adopted by a majority vote. The PUC approved a Proposal for Publication relating to Commission directives to ERCOT on November 14, 2025, and stakeholders filed comments in December. More information can be found on the PUC Interchange under Project No. 57883.

The PUC also continues implementing provisions from SB 3, a broad-based law adopted in 2021 in response to that year’s winter emergency that led to statewide power outages. A proposed rule from that 2021 law that remains under consideration relates to implementation of ERCOT’s Firm Fuel Supply Service, an ERCOT reliability service intended to address reliability during extreme heat and cold weather conditions. The FFSS provides market rewards to generators with on-site fuel. Resources eligible for the service under the authorizing statute, PURA § 39.159, include “on-site fuel storage, dual fuel capability, or fuel supply arrangements to ensure winter performance for several days.” PUC Staff have reviewed rulemaking recommendations filed in the spring by cities and other stakeholders, and then on October 23, 2025, proposed new 16 Tex. Admin. Code §25.520. Under the proposed rule, FFSS eligibility would be expanded to include generators with off-site natural gas storage arrangement. More information can be found on the PUC Interchange under Docket No. 58434.

Roslyn Warner is a Principal in the Firm’s Energy and Utility Practice Group, Jake Dyer is an Analyst in the Firm’s Energy and Utility Practice Group, and Jack Klug is an Associate in the Firm’s Energy and Utility Practice Group. If you would like additional information related to this article or other matters, please contact Roslyn at 512.322.5802 or rwarner@lglawfirm.com, Jake at 512.322.5898 or jdyer@lglawfirm.com, or Jack at 512.322.5837 or jklug@lglawfirm.com.