Relating to the authority of the Public Utility Commission of Texas to retain assistance for regional proceedings affecting certain electric utilities and consumers.
ModeratePlan for compliance
High Cost
Effective:2025-06-20
Enforcing Agencies
Public Utility Commission of Texas (PUC) • Office of the Attorney General (OAG)
01
Compliance Analysis
Key implementation requirements and action items for compliance with this legislation
Implementation Timeline
Effective Date: June 20, 2025 (Law is currently active).
Compliance Deadline: Immediate upon receipt of an invoice from the PUC. You must pay "timely" to avoid enforcement action.
Agency Rulemaking: The PUC must review and approve your cost recovery rider before you can collect from ratepayers. Expect a "regulatory lag" period where you have paid the PUC but have not yet implemented the rider.
Immediate Action Plan
1.Identify Jurisdiction: Confirm if you are a non-ERCOT IOU (Panhandle, East Texas, El Paso). If you are ERCOT-only, this does not apply.
2.Establish Regulatory Asset: Open a specific accounting code immediately to track Section 39.004(c) payments and associated carrying charges.
3.Draft the Rider: Have legal counsel draft the cost recovery rider application now so it can be filed immediately after the first significant payment is made.
4.Update AP Workflows: Flag the PUC as a "Priority Payor" in your vendor system to ensure invoices are not rejected or delayed.
Operational Changes Required
Contracts
Vendor Management: You will not hold the contract with the consultants; the PUC will. However, you must treat the PUC as a priority vendor.
Invoice Processing: Update Accounts Payable protocols. Invoices submitted by the PUC under Section 39.004(c) must bypass standard Net-60 or Net-90 terms. Establish a "Pay Upon Receipt" or Net-30 protocol to satisfy the statutory requirement of "timely" payment.
Lobbyist Verification: Before processing payment, verify the PUC-retained individual is not a registered lobbyist. The statute prohibits the PUC from retaining registered lobbyists; payments to such individuals may be legally contestable.
Hiring/Training
Regulatory Accounting: Train accounting staff to segregate these payments into a dedicated regulatory asset account rather than expensing them immediately.
Interest Calculation: Staff must be trained to accrue carrying charges (interest) starting from the specific date of cash disbursement to the PUC.
Reporting & Record-Keeping
Cap Tracking: Implement an internal control to track cumulative payments to the PUC. You are statutorily capped at $1.5 million in a 12-month period. You must flag and challenge any invoice that pushes you over this limit.
Rider Filing: Prepare a pro forma tariff sheet for the annual rider application. This filing must document the costs paid and the carrying charges accrued.
Fees & Costs
Cash Flow Impact: Budget for a potential liquidity hit of up to $1.5 million annually.
Recovery: These costs are pass-through. You will recover the principal plus carrying charges once the rider is approved.
Strategic Ambiguities & Considerations
Definition of "Timely": The statute requires "timely" payment but fails to define a specific window (e.g., 10 days vs. 30 days). Until the PUC defines this via rule, we advise paying within 30 days to mitigate enforcement risk.
Scope of "Regional Proceedings": The PUC may hire assistance for matters that "may affect" rates. This is broad language. Regulatory counsel should scrutinize PUC retention orders to ensure they strictly pertain to regional/federal proceedings and not general state-level investigations.
Rider Approval Process: It is unclear if the rider approval will be administrative (expedited) or a full contested case. Prepare for a full docket but advocate for administrative approval.
Need Help Understanding Implementation?
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Information 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.
The Public Utility Commission of Texas (PUC) frequently holds regional transmission proceedings that affect electric utilities and consumers. These proceedings can involve complex decisions related to an electric utility's operations within a Regional Transmission Organization or an Independent System Operator. The bill author has informed the committee that, given the technical and regulatory complexity of these matters, the PUC may need to hire external experts such as consultants, engineers, accountants, or attorneys to assist in these proceedings. H.B. 4668 seeks to address this issue by ensuring that the PUC has the resources it needs to effectively represent Texas' interests in complex regional matters while maintaining transparency and protecting consumers from excessive charges.
CRIMINAL JUSTICE IMPACT
It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.
ANALYSIS
H.B. 4668 amends the Utilities Code to authorize the Public Utility Commission of Texas (PUC) to retain any consultant, accountant, auditor, engineer, or attorney the PUC considers necessary to represent the PUC in a proceeding before a regional transmission organization, or before a court reviewing proceedings of a regional transmission organization, related to the following:
·the relationship of an electric utility to a power region, regional transmission organization, or independent system operator;
·the approval of an agreement among an electric utility and the electric utility's affiliates concerning the coordination of the operations of the electric utility and the electric utility's affiliates; or
·other matters related to an electric utility that may affect the ultimate rates paid by retail customers in Texas.
The bill establishes that assistance for which a person listed above may be retained includes conducting a study, conducting an investigation, presenting evidence, or advising or representing the PUC.
H.B. 4668 requires an electric utility that is the subject of a proceeding to pay timely the reasonable costs of the services of a retained person, as determined by the PUC, and caps the total costs an electric utility is required to pay at $1.5 million in a 12-month period. The bill requires the PUC to allow an electric utility to recover both the total costs the electric utility paid and the carrying charges for those costs through a rider established annually to recover the costs paid and carrying charges incurred during the preceding calendar year. The bill prohibits the rider from being implemented before the rider is reviewed and approved by the PUC.
H.B. 4668 requires the PUC to consult the attorney general before retaining a consultant, accountant, auditor, or engineer under the bill's provisions. The bill establishes that the retention of an attorney is subject to the approval of the attorney general under statutory provisions relating to legal services. The bill establishes that the PUC is precluded from engaging any individual required to register as a lobbyist under state law.
H.B. 4668 applies to the following investor-owned non-ERCOT electric utilities:
·an electric utility with fewer than six synchronous interconnections with voltage levels above 69 kilovolts systemwide;
·an electric utility that was included in the Southeastern Electric Reliability Council on January 1, 2005; and
·an electric utility that was included in the Southwest Power Pool on January 1, 2008 and was not affiliated with that council on that date.
EFFECTIVE DATE
On passage, or, if the bill does not receive the necessary vote, September 1, 2025.
Honorable Ken King, Chair, House Committee on State Affairs
FROM:
Jerry McGinty, Director, Legislative Budget Board
IN RE:
HB4668 by King (Relating to the authority of the Public Utility Commission of Texas to retain assistance for regional proceedings affecting certain electric utilities and consumers.), As Introduced
No significant fiscal implication to the State is anticipated.
It is assumed that any costs associated with the bill could be absorbed using existing resources.
Local Government Impact
No significant fiscal implication to units of local government is anticipated.
Source Agencies:
302 Office of the Attorney General, 473 Public Utility Commission of Texas
LBB Staff:
JMc, WP, JBel
Related Legislation
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Effective immediately, HB4668 mandates that non-ERCOT investor-owned utilities directly fund the Public Utility Commission’s (PUC) external legal and consulting costs for regional proceedings, capped at $1. 5 million annually per utility. While these costs are fully recoverable via a surcharge rider, affected utilities must immediately prepare for significant cash flow outlays and establish specific regulatory asset accounts to track these payments and accruable interest.
Q
Who authored HB4668?
HB4668 was authored by Texas Representative Ken King during the Regular Session.
Q
When was HB4668 signed into law?
HB4668 was signed into law by Governor Greg Abbott on June 20, 2025.
Q
Which agencies enforce HB4668?
HB4668 is enforced by Public Utility Commission of Texas (PUC) and Office of the Attorney General (OAG).
Q
How urgent is compliance with HB4668?
The compliance urgency for HB4668 is rated as "moderate". Businesses and organizations should review the requirements and timeline to ensure timely compliance.
Q
What is the cost impact of HB4668?
The cost impact of HB4668 is estimated as "high". This may vary based on industry and implementation requirements.
Q
What topics does HB4668 address?
HB4668 addresses topics including utilities, utilities--electric, attorney general and public utility commission.
Legislative data provided by LegiScanLast updated: November 25, 2025
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