HB 5247 Texas House · 89th Legislature (2025)

Relating to an alternative capital recovery process for certain utilities.

HB 5247 creates an alternative process for specific Texas electric utilities (those operating solely within ERCOT and identified for Permian Basin transmission construction) to adjust rates for capital investments. It allows these utilities to file a single annual rate adjustment instead of multiple adjustments when their capital spending exceeds 300% of annual depreciation in a year. The bill requires 60 days' notice to the commission, evidence of ongoing eligibility, and permits deferring costs (including depreciation) at the utility’s weighted average cost of capital. This directly affects utilities building Permian Basin transmission infrastructure, changing how they recover capital costs through rate filings.

Bill status signed all 5 stages cleared

Introduction

Apr 2025

Committee Review

May 2025

House Passage

May 2025

Senate Passage

May 2025

Signed into Law

Jun 2025

Introduced Apr 7, 2025 Signed Jun 20, 2025

Maddy AI version diff · 2 comparisons

What changed between versions

Engrossed → Enrolled · 5 edits · Jun 20, 2025

MODERATE

The bill was finalized and formatted for official enactment, with significant substantive changes to its scope and applicability. The most notable policy change is the expansion of eligibility to include river authorities and the addition of a sunset provision, ensuring the temporary rate adjustment mechanism expires on December 31, 2035. These changes clarify the bill's intended lifespan and broaden the range of utilities that can utilize the alternative capital recovery process.

Scope change

The bill's scope was expanded to include river authorities, which were previously excluded from using this specific capital recovery procedure. Additionally, a sunset date was added to limit the bill's applicability to December 31, 2035.

SCOPE

River authorities are now explicitly included as eligible entities to use the single capital investment procedure, whereas the original text excluded them.

TIMELINE

A sunset provision was added, requiring the section to expire on December 31, 2035, establishing a clear end date for the temporary rate adjustment mechanism.

Specific conditions were added for refunding deferred equity portions of carrying costs if a transmission project is unreasonably delayed beyond December 31, 2030.

REQUIREMENT

The exclusivity clause was modified to prevent utilities from petitioning for another adjustment under this section before the first anniversary of their initial filing, ensuring a one-time use per cycle.

ENFORCEMENT

New provisions were added to authorize the commission to review investment costs for prudence in future proceedings and to refund improperly recovered amounts with carrying costs.

Introduced → Engrossed · 7 edits · May 25, 2025

MODERATE

The bill was updated from its original introduced version to an engrossed version, incorporating significant substantive changes to the capital recovery process for certain electric utilities in Texas. The primary changes include expanding eligibility criteria, adjusting capital expenditure thresholds, modifying regulatory asset amortization periods, and adding new provisions for handling delayed transmission projects. These changes aim to provide more flexibility and clarity for utilities seeking rate adjustments while ensuring consumer protection.

Scope change

The bill now specifically applies to utilities constructing transmission as part of the Permian Basin reliability plan approved under Section 39.167, in addition to utilities operating solely inside ERCOT. The scope also includes utilities that make total capital expenditures exceeding 300 percent of annual depreciation in a calendar year.

ELIGIBILITY

Added specific requirement that utilities must be identified by the commission as responsible for constructing transmission as part of the Permian Basin reliability plan approved under Section 39.167.

TIMELINE

Changed the effective date threshold from 'before September 1, 2025, and in the prior calendar year' to 'in a calendar year may elect in the following calendar year' for filing rate adjustment proceedings.

REQUIREMENT

Extended the regulatory asset amortization period from a maximum of 12 months to a maximum of 18 months, with provisions for longer periods if needed to prevent excessive returns.

Added new requirement for utilities to notify the commission if they no longer qualify for continued use of the adjustment mechanism.

Added requirement for utilities to take into account changes in customer numbers and the effects of energy consumption and demand on revenue recovered through base rates.

ENFORCEMENT

Added provision allowing the commission to refund to customers the realized equity portion of carrying costs deferred on transmission projects if in-service dates are unreasonably delayed beyond December 31, 2030.

TECHNICAL

Added Section 3 regarding intent to harmonize amendments with other Acts of the 89th Legislature, Regular Session, 2025.

Floor votes · House May 8, 2025

How they voted

This bill passed the Senate by voice vote (no roll call recorded).

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Amendments

Jun 20, 2025

Signed into law

Signed by the Governor

executive

May 31, 2025

Upper · Passed

Signed in the Senate

upper

May 30, 2025

Lower · Passed

Signed in the House

lower

May 28, 2025

Introduced

House concurs in Senate amendment(s)-reported

upper

May 28, 2025

Introduced

Text of Senate Amendment(s)

lower

May 28, 2025

Introduced

House concurs in Senate amendment(s)

lower

May 27, 2025

Introduced

Senate Amendments Analysis distributed

lower

May 27, 2025

Introduced

Senate Amendments distributed

lower

May 27, 2025

Lower · Passed

Senate passage as amended reported

lower

May 25, 2025

Upper · Passed

Passed

upper

May 22, 2025

Upper · Passed

Committee report printed and distributed

upper

May 22, 2025

Upper · Passed

Reported favorably as substituted

upper

May 22, 2025

Upper · Passed

Vote taken in committee

upper

May 15, 2025

Upper · Passed

Left pending in committee

upper

May 15, 2025

Upper · Passed

Testimony taken in committee

upper

May 9, 2025

Committee

Referred to Business & Commerce

upper

May 9, 2025

Introduced

Read first time

upper

May 8, 2025

Introduced

Received from the House

upper

May 8, 2025

Lower · Passed

Passed

lower

May 8, 2025

Amended

Amendment fails of adoption

lower

May 7, 2025

Lower · Passed

Passed to engrossment

lower

Apr 29, 2025

Lower · Passed

Committee report sent to Calendars

lower

Apr 28, 2025

Lower · Passed

Committee report distributed

lower

Apr 24, 2025

Lower · Passed

Reported favorably as substituted

lower

Apr 23, 2025

Lower · Passed

Left pending in committee

lower

Apr 23, 2025

Lower · Passed

Testimony taken/registration(s) recorded in committee

lower

Apr 7, 2025

Committee

Referred to State Affairs

lower

Apr 7, 2025

Introduced

Read first time

lower

2 primary · 0 co-sponsors