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Signed Into Law
Signed June 12, 2025Effective 2025-09-01
SB2268

Regular Session

Relating to loans and grants awarded from the Texas energy fund.

Government Affairs & Regulatory Compliance Analysis

SB2268: Government Affairs Overview

SB 2268 fundamentally restructures debt security options for Municipally Owned Utilities (MOUs) and Electric Cooperatives (ECs) seeking Texas Energy Fund (TEF) loans, permitting these loans to be treated as parity debt rather than subordinate obligations. For all generation developers, the bill expands confidentiality protections to all correspondence with the PUC and creates a statutory mechanism to extend funding disbursement beyond the previous December 31, 2025, hard deadline.

Sen. Charles Schwertner·Senate Bill·Regular Session

Moderate
Low Cost
Effective:2025-09-01
Business Impact

Who SB2268 Affects

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

Regulatory Priority: moderate

Notable regulatory updates (effective 2025-09-01). 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

  • 1Loan Agreements: Pending loan agreements must be revised to reference Section 34.0104(b-1) as the statutory authority for the security interest.

Estimated Cost Impact

lowMinimal cost impact anticipated.

Enforcing Agencies

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SB2268
Moderate
Relating to loans and grants awarded from the Texas energy fund.
Moderate Compliance Urgency
Requires near-term attention
Cost Impact
Low
Effective
2025-09-01
Enforcing Agencies
Public Utility Commission of Texas
Primary Author: Sen. Charles Schwertner
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, 2025 (or immediately upon Governor's signature if passed by a two-thirds vote).
  • Compliance Deadline: Immediate for entities with pending TEF applications who wish to utilize the new security structures. Extension requests for disbursement should be filed by Q3 2025.
  • Agency Rulemaking: The Public Utility Commission (PUC) is not explicitly mandated to create new rules, but they must adjudicate disbursement extensions on a "case-by-case" basis. Expect a "regulatory gray zone" regarding the definition of "market factors" until the first extension requests are ruled upon in late 2025.

Immediate Action Plan

  • Immediately: Direct outside counsel to supplement pending TEF applications to reflect the new parity debt security structure (MOUs/ECs only).
  • Immediately: Update email footers and document templates to include the specific SB 2268 confidentiality citation for all TEF-related communications.
  • Q3 2025: Audit project timelines. If a 2025 commercial operation date (COD) is at risk, begin drafting the "Market Factor" justification dossier for a disbursement extension request.
  • Ongoing: Monitor PUC open meetings for the first "test case" regarding disbursement extensions to gauge the Commission's strictness on the definition of "market factors."

Operational Changes Required

Contracts

  • Master Trust Indentures (MOUs & ECs): You must direct bond counsel to review existing indentures. Confirm that TEF loans, now structured as parity debt under SB 2268, satisfy your "Additional Bonds" or "Additional Indebtedness" tests.
  • Loan Agreements: Pending loan agreements must be revised to reference Section 34.0104(b-1) as the statutory authority for the security interest.
  • EPC Contracts: If your project timeline risks crossing the Dec 31, 2025 threshold, ensure your Engineering, Procurement, and Construction contracts contain specific force majeure or delay clauses that align with the "market factors" justification required for a TEF extension.

Hiring/Training

  • Document Management Protocols: Update internal training for regulatory teams. The bill expands confidentiality to information submitted "at any time." Staff must be trained to mark all post-application correspondence (emails, RFIs, status updates) as "CONFIDENTIAL – SB 2268/UTIL CODE 34.0103." Do not rely on the initial application's NDA.

Reporting & Record-Keeping

  • Disbursement Extension Requests: To access funds after Dec 31, 2025, you must file a formal request. You must maintain an evidentiary record starting now—documenting supply chain delays, interconnection queue issues, and interest rate volatility—to prove "market factors" necessitated the delay.

Fees & Costs

  • No new state fees.
  • Legal Costs: Anticipate billable hours for bond counsel to restructure the security provisions of pending loan applications.

Strategic Ambiguities & Considerations

  • Definition of "Market Factors": The statute allows disbursement extensions based on "market factors" but fails to define the term. It is unclear if the PUC will accept general inflationary pressures or if they will require specific, documented supply chain failures.
  • "Case-by-Case" Discretion: The PUC has broad discretion to deny extensions. There is no automatic safe harbor. If the PUC determines a delay is due to applicant mismanagement rather than external market forces, funding could be revoked.

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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 11, 2025
Passed Senate
Apr 29, 2025
Passed House
May 23, 2025
Signed
Jun 12, 2025
Effective
Sep 1, 2025
TopicsState FinancesState Finances--management & ControlUtilitiesUtilities--electricPublic Utility Commission
03

Senate Authors

Sen. Charles SchwertnerRepublican · Primary Author
Coauthors (1)

House Sponsor

Rep. Todd HunterRepublican · Primary Sponsor

Bill Text(with markup)

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

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Quick Reference

Frequently Asked Questions

Common questions about SB2268

Q

What does Texas SB2268 do?

SB 2268 fundamentally restructures debt security options for Municipally Owned Utilities (MOUs) and Electric Cooperatives (ECs) seeking Texas Energy Fund (TEF) loans, permitting these loans to be treated as parity debt rather than subordinate obligations. For all generation developers, the bill expands confidentiality protections to all correspondence with the PUC and creates a statutory mechanism to extend funding disbursement beyond the previous December 31, 2025, hard deadline.

Q

Who authored SB2268?

SB2268 was authored by Texas Senator Charles Schwertner during the Regular Session.

Q

When was SB2268 signed into law?

SB2268 was signed into law by Governor Greg Abbott on June 12, 2025.

Q

Which agencies enforce SB2268?

SB2268 is enforced by Public Utility Commission of Texas.

Q

How significant are the changes in SB2268?

The regulatory priority for SB2268 is rated as "moderate". Businesses and organizations should review the legislation to understand potential impacts.

Q

What is the cost impact of SB2268?

The cost impact of SB2268 is estimated as "low". This may vary based on industry and implementation requirements.

Q

What topics does SB2268 address?

SB2268 addresses topics including state finances, state finances--management & control, utilities, utilities--electric and public utility commission.

Q

What are the key dates for SB2268?

Key dates for SB2268: Effective date is 2025-09-01. Consult with legal counsel regarding applicability.

Q

Which Texas businesses are affected by SB2268?

SB2268 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