HB912

Regular Session

Relating to the compensation of a distributed renewable generation owner in certain areas outside of ERCOT.

ModeratePlan for compliance

Medium Cost

Effective:2026-09-01

Enforcing Agencies

Public Utility Commission of Texas (PUC)

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

Effective Date: September 1, 2026
Compliance Deadline: Immediate for Financial Modeling. While the statutory bar takes effect in 2026, businesses projecting ROI for solar projects coming online after that date must adjust financial models to reflect this new regulatory safeguard.
Agency Rulemaking: High Probability (2025-2026). The PUC must determine what constitutes "established best practices" for the required CBA. Expect a contested rulemaking period prior to the effective date to define the methodology utilities must use.

Immediate Action Plan

Audit Geography: Confirm which of your Texas facilities are in non-ERCOT territories (e.g., El Paso, Panhandle, East Texas). Facilities within ERCOT are not protected by this bill.
Preserve Data: Ensure your solar inverters and metering equipment are recording high-resolution interval data to prove your load profile does not harm the grid.
Update Financial Models: For projects with a 2026+ COD (Commercial Operation Date), adjust risk profiles to reflect that net metering rates are statutorily protected until proven otherwise.
Monitor Rulemaking: Instruct your trade association representatives to intervene when the PUC opens the docket to define the CBA methodology.

Operational Changes Required

Contracts

Power Purchase Agreements (PPAs): Third-party solar developers and host customers must review "Change in Law" and "Tariff Modification" clauses. This statute strengthens the stability of projected savings, but contracts should explicitly address how parties will share costs if a utility successfully passes a new fee via a CBA after 2026.
ROI Projections: Capital expenditure proposals for non-ERCOT facilities can now assume a higher degree of rate stability. Update internal investment memos to reflect that adverse rate changes now require a significant regulatory hurdle.

Hiring/Training

Regulatory Monitoring: In-house counsel or compliance officers must be trained to monitor PUC filings for "Alternative Compensation Method" applications starting late 2026.
Technical Consultants: If your utility files a rate case, you will need to engage energy economists or rate analysts to challenge the utility's CBA methodology.

Reporting & Record-Keeping

Generation Logging: Maintain granular data on your facility's onsite generation and consumption. If a utility attempts to alter rates based on a CBA, you must possess your own load profile data to rebut claims regarding your facility's impact on peak demand or grid stability.

Fees & Costs

Fee Prevention: This bill is a defensive measure designed to prevent the implementation of new "solar surcharges" or "standby fees."
Litigation Budget: Allocate potential budget for legal intervention. If a utility files a CBA to lower solar credit rates, trade associations and large commercial users will need to fund a legal intervention to protect the current rate structure.

Strategic Ambiguities & Considerations

The statute relies on terms that are not strictly defined, creating a battleground for future PUC rulemaking:

1. "Established Best Practices": The law requires the CBA to follow this standard, but there is no single industry consensus. Utilities will push for methodologies that highlight lost revenue; businesses must push for "Value of Solar" methodologies that quantify avoided transmission and capacity costs.
2. "Comprehensive": It is unclear if the analysis must include non-energy benefits such as environmental compliance savings or grid resilience. The broader the definition of "comprehensive," the better the outcome for solar owners.

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Legislative Timeline

This bill's path through the Texas Legislature

TopicsEnergy Energy--general Utilities Utilities--electric Utilities--general Public Utility Commission Renewable Energy

Official Analysis

View HRO Analysis View All Bill Documents

BILL ANALYSIS

H.B. 912

By: Moody

State Affairs

Committee Report (Unamended)

BACKGROUND AND PURPOSE

Under current law, distributed renewable generation owners that operate outside the purview of ERCOT have statutorily prescribed methods of compensation within the Public Utility Regulatory Act. However, this could prevent the Public Utility Commission of Texas from exercising flexibility with respect to those owners as the nature of alternative energy generation evolves within Texas. H.B. 912 seeks to address this issue by specifying the application of statutory provisions related to compensation for distributed renewable generation owners in certain areas outside of ERCOT.

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. 912 amends the Utilities Code to specify that existing statutory provisions related to compensation for distributed renewable generation owners that choose interconnection through a single meter apply unless the Public Utility Commission of Texas approves an alternative method for the compensation of such an owner for electricity generated by distributed renewable generation or a qualifying facility.

EFFECTIVE DATE

September 1, 2025.

House Authors

Rep. Joseph MoodyDemocrat · Primary Author

Senate Sponsor

Sen. Cesar BlancoDemocrat · Primary Sponsor

Bill Text(with markup)

H.B. No. 912

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

	AN ACT
	relating to the compensation of a distributed renewable generation
	owner in certain areas outside of ERCOT.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1. Section 39.554, Utilities Code, is amended by
	amending Subsection (f) and adding Subsection (i) to read as
	follows:
	(f) Unless the commission approves an alternative method
	for compensating a distributed renewable generation owner for
	electricity generated by distributed renewable generation or a
	qualifying facility, for [~~For~~] a distributed renewable generation
	owner that chooses interconnection through a single meter under
	Subsection (e):
	(1) the amount of electricity the owner generates
	through distributed renewable generation or a qualifying facility
	for a given billing period offsets the owner's consumption for that
	billing period; and
	(2) any electricity the owner generates through
	distributed renewable generation or a qualifying facility that
	exceeds the owner's consumption for a given billing period shall be
	credited to the owner under Subsection (g).
	(i) Before approving an alternative method for compensating
	a distributed renewable generation owner for electricity generated
	by distributed renewable generation or a qualifying facility, the
	commission shall require the electric utility to conduct and submit
	to the commission a comprehensive cost-benefit analysis using
	established best practices to justify the rates of compensation and
	any associated fees. The commission must consider the
	comprehensive cost-benefit analysis before approving alternative
	rates for compensating distributed renewable generation owners or
	the continuation of net metering, including any rates or fees that
	apply only to distributed renewable generation owners and reflect
	the value provided by the distributed renewable generation or
	qualifying facility.
	SECTION 2. This Act takes effect September 1, 2026.

LEGISLATIVE BUDGET BOARD
Austin, Texas

FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION


March 10, 2025

TO:	Honorable Ken King, Chair, House Committee on State Affairs

FROM:	Jerry McGinty, Director, Legislative Budget Board

IN RE:	HB912 by Moody (Relating to the compensation of a distributed renewable generation owner in certain areas outside of ERCOT.), 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:

473 Public Utility Commission of Texas

LBB Staff:

JMc, WP, GDZ, JBel

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Frequently Asked Questions

Common questions about HB912

What does Texas HB912 do?

HB912 prohibits investor-owned electric utilities outside the ERCOT grid (e. g. , El Paso Electric, SWEPCO) from altering net metering rates or imposing distributed generation fees without first submitting a comprehensive cost-benefit analysis (CBA) to the Public Utility Commission (PUC).

Who authored HB912?

HB912 was authored by Texas Representative Joseph Moody during the Regular Session.

When was HB912 signed into law?

HB912 was signed into law by Governor Greg Abbott on May 20, 2025.

Which agencies enforce HB912?

HB912 is enforced by Public Utility Commission of Texas (PUC).

How urgent is compliance with HB912?

The compliance urgency for HB912 is rated as "moderate". Businesses and organizations should review the requirements and timeline to ensure timely compliance.

What is the cost impact of HB912?

The cost impact of HB912 is estimated as "medium". This may vary based on industry and implementation requirements.

What topics does HB912 address?

HB912 addresses topics including energy, energy--general, utilities, utilities--electric and utilities--general.

Legislative data provided by LegiScanLast updated: November 25, 2025

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