Relating to the recovery of certain costs associated with a gas utility's plant, facilities, or equipment placed in service.

Gas utilities can recover deferred costs

Texas gas utilities can record certain costs for later recovery through customer rates. This covers plants, facilities, and equipment already in service. Their costs must not already be recovered in rates or set aside in another account for later recovery. Eligible costs include financing costs, depreciation, and property taxes. Financing costs equal unrecovered plant costs multiplied by the utility’s approved pre-tax weighted average cost of capital, continuing until recovery. That capital rate comes from the Railroad Commission’s final order in the utility’s latest general rate case. The deferred costs must enter the commission’s approved cost-recovery system. Utilities must adjust their accounts when those costs are recovered in rates. The commission must review the costs in a general rate case; any costs it disallows must be refunded with interest. The commission must adopt rules within 270 days after the law takes effect. The law sets September 1, 2025, as its effective date, with immediate effect upon two-thirds approval in each legislative house. It applies only to cost-recovery proceedings started on or after its effective date; earlier proceedings remain under the prior law.