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Signed Into Law
Signed June 20, 2025Effective 2025-06-20
HB4668

Regular Session

Relating to the authority of the Public Utility Commission of Texas to retain assistance for regional proceedings affecting certain electric utilities and consumers.

Government Affairs & Regulatory Compliance Analysis

HB4668: Government Affairs Overview

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.

Rep. Ken King·House Bill·Regular Session

Moderate
High Cost
Effective:2025-06-20
Business Impact

Who HB4668 Affects

This legislation has regulatory implications for the following Texas businesses and organizations:

Regulatory Priority: moderate

Notable regulatory updates (effective 2025-06-20). Consider how these changes may affect your operations.

⚡

Energy

Affected business types:

  • Power generators
  • Electric utilities
  • Renewable energy developers
  • Battery storage operators
View all energy legislation

Key Operational Considerations

  • 1Vendor Management: You will not hold the contract with the consultants; the PUC will. However, you must treat the PUC as a priority vendor.
  • 2Regulatory Accounting: Train accounting staff to segregate these payments into a dedicated regulatory asset account rather than expensing them immediately.

Estimated Cost Impact

highSignificant operational investment may be required.

Enforcing Agencies

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HB4668
Relating to the authority of the Public Utility Commission of Texas to retain assistance for regional proceedings affecting certain electric utilities...
Moderate Urgency
Passed with Opposition
House Vote125 - 20
YEA
86% in favor145 voting
Senate Vote31 - 0
YEA
100% in favor31 voting
20
Total Opposition Votes
Cost Impact
High
Effective
2025-06-20
Enforcing Agencies
OAGPUC
Primary Author: Rep. Ken King
89th Texas Legislature
jdkey.com
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 Compliance Guidance on This Legislation?

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.

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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.

02

Legislative Timeline

This bill's path through the Texas Legislature

Filed
Mar 12, 2025
Passed House
May 6, 2025
Passed Senate
May 25, 2025
Signed
Jun 20, 2025
Effective
Jun 20, 2025
TopicsUtilitiesUtilities--electricAttorney GeneralPublic Utility Commission
03

House Authors

Rep. Ken KingRepublican · Primary Author
Coauthors (2)

Senate Sponsor

Sen. Charles SchwertnerRepublican · Primary Sponsor

Bill Text(with markup)

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

Related Legislation

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More from Rep. Ken King

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Related by Topic

View more Utilities legislation
Quick Reference

Frequently Asked Questions

Common questions about HB4668

Q

What does Texas HB4668 do?

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 Office of the Attorney General (OAG) and Public Utility Commission of Texas (PUC).

Q

How significant are the changes in HB4668?

The regulatory priority for HB4668 is rated as "moderate". Businesses and organizations should review the legislation to understand potential impacts.

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.

Q

What are the key dates for HB4668?

Key dates for HB4668: Effective date is 2025-06-20. Rulemaking: Must review and approve the annual cost recovery rider filed by the utility. (Prior to rider implementation). Consult with legal counsel regarding applicability.

Q

Which Texas businesses are affected by HB4668?

HB4668 primarily affects utility companies and energy providers. These businesses should review the legislation with their legal and compliance teams to understand potential impacts.

Need Strategic Guidance on This Legislation?

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.

Legislative data provided by LegiScanLast updated: January 11, 2026