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Signed Into Law
Signed May 20, 2025Effective 2026-09-01
HB912

Regular Session

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

Government Affairs & Regulatory Compliance Analysis

HB912: Government Affairs Overview

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).

Rep. Joseph Moody·House Bill·Regular Session

Moderate
Medium Cost
Effective:2026-09-01
Business Impact

Who HB912 Affects

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

Regulatory Priority: moderate

Notable regulatory updates (effective 2026-09-01). 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

  • 1Regulatory Monitoring: In-house counsel or compliance officers must be trained to monitor PUC filings for "Alternative Compensation Method" applications starting late 2026.
  • 2Technical 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.

Estimated Cost Impact

mediumModerate costs expected for implementation.

Enforcing Agencies

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HB912
Relating to the compensation of a distributed renewable generation owner in certain areas outside of ERCOT.
Moderate Urgency
Unanimous Passage
House Vote148 - 0
YEA
100% in favor148 voting
Senate Vote31 - 0
YEA
100% in favor31 voting
Cost Impact
Medium
Effective
2026-09-01
Enforcing Agencies
PUC
Primary Author: Rep. Joseph Moody
89th Texas Legislature
jdkey.com
01

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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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.

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Legislative Timeline

This bill's path through the Texas Legislature

Filed
Nov 12, 2024
Passed House
Apr 9, 2025
Passed Senate
May 7, 2025
Signed
May 20, 2025
Effective
Sep 1, 2026
TopicsEnergyEnergy--generalUtilitiesUtilities--electricUtilities--generalPublic Utility CommissionRenewable Energy
03

House Authors

Rep. Joseph MoodyDemocrat · Primary Author

Senate Sponsor

Sen. Cesar BlancoDemocrat · 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. Joseph Moody

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Related by Topic

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Quick Reference

Frequently Asked Questions

Common questions about HB912

Q

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).

Q

Who authored HB912?

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

Q

When was HB912 signed into law?

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

Q

Which agencies enforce HB912?

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

Q

How significant are the changes in HB912?

The regulatory priority for HB912 is rated as "moderate". Businesses and organizations should review the legislation to understand potential impacts.

Q

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.

Q

What topics does HB912 address?

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

Q

What are the key dates for HB912?

Key dates for HB912: Effective date is 2026-09-01. Consult with legal counsel regarding applicability.

Q

Which Texas businesses are affected by HB912?

HB912 primarily affects energy companies and power generators, 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