Regular Session
Government Affairs & Regulatory Compliance Analysis
HB2712 fundamentally alters ratemaking for Class A, B, C, and D water and sewer utilities by authorizing the use of future or combined test years rather than strictly historical data. While this allows for faster recovery of capital investments, it imposes strict liability: if projections result in over-earning, utilities must issue mandatory refunds to customers.
Rep. Drew Darby·House Bill·Regular Session
Municipal Regulatory Authorities (exercising original jurisdiction) • Public Utility Commission of Texas
This legislation has regulatory implications for the following Texas businesses and organizations:
Notable regulatory updates (effective 2025-06-20). Consider how these changes may affect your operations.
Affected business types:
mediumModerate costs expected for implementation.
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JD Key Consulting provides strategic guidance on Texas regulatory compliance and legislative impact for your business.
Key implementation requirements and action items for compliance with this legislation
The statute leaves critical enforcement details to the PUC. Watch for the following during the 2025-2026 rulemaking process:
JD Key Consulting specializes in Texas regulatory compliance strategy. Work directly with James Dickey—former Chairman of the Republican Party of Texas—to understand this bill's impact on your operations and develop an actionable compliance plan.
Schedule a ConsultationInformation presented is for general knowledge only and is provided without warranty, express or implied. Consult qualified government affairs professionals and legal counsel before making compliance decisions.
This bill's path through the Texas Legislature
Explore more bills from this author and on related topics
Common questions about HB2712
HB2712 fundamentally alters ratemaking for Class A, B, C, and D water and sewer utilities by authorizing the use of future or combined test years rather than strictly historical data. While this allows for faster recovery of capital investments, it imposes strict liability: if projections result in over-earning, utilities must issue mandatory refunds to customers.
HB2712 was authored by Texas Representative Drew Darby during the Regular Session.
HB2712 was signed into law by Governor Greg Abbott on June 20, 2025.
HB2712 is enforced by Municipal Regulatory Authorities (exercising original jurisdiction) and Public Utility Commission of Texas.
The regulatory priority for HB2712 is rated as "moderate". Businesses and organizations should review the legislation to understand potential impacts.
The cost impact of HB2712 is estimated as "medium". This may vary based on industry and implementation requirements.
HB2712 addresses topics including utilities and utilities--water & sewer.
Key dates for HB2712: Effective date is 2025-06-20. Rulemaking: Adopt rules necessary to implement future and combined test year methodologies and expense adjustments. (2026-09-01). Consult with legal counsel regarding applicability.
HB2712 establishes the following penalties: administrative penalty of Mandatory refund of excess collections for Using a future/combined test year that results in rates yielding more than a fair return on invested capital (over-earning).. Consult with legal counsel for specific applicability to your situation.
HB2712 primarily affects utility companies and energy providers. These businesses should review the legislation with their legal and compliance teams to understand potential impacts.
JD Key Consulting is an Austin, Texas-based government affairs firm led by James Dickey, former Chairman of the Republican Party of Texas. We specialize in Texas regulatory compliance and legislative strategy for data centers, energy, banking, and manufacturing.
