Relating to the consideration of the proportion of long-term debt and equity capitalization in establishing the rates of certain electric utilities.

This bill requires Texas utility regulators to use an electric utility's actual debt and equity mix (as reported in its most recent financial statement) when calculating rates for utilities operating solely within the ERCOT grid. If regulators determine this actual ratio is unreasonable, they must instead use the national average equity ratio for similar electric utilities. The law applies only to new rate cases initiated after the bill's effective date (September 1, 2025, unless passed with a two-thirds vote). It does not change how rates are calculated, but establishes a new presumption about what constitutes a reasonable capital structure for rate-setting.