Tex. Codes » Utilities Code · TITLE 2. PUBLIC UTILITY REGULATORY ACT · SUBTITLE B. ELECTRIC UTILITIES · CHAPTER 36. RATES
Texas Codes

Tex. Util. Code § 36.058 (2026)

Consideration Of Payment To Affiliate

✓ laws through the 89th Legislature (2025)
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Sec. 36.058. CONSIDERATION OF PAYMENT TO AFFILIATE. (a) Except as provided by Subsection (b), the regulatory authority may not allow as capital cost or as expense a payment to an affiliate for:

(1) the cost of a service, property, right, or other item; or

(2) interest expense.

(b) The regulatory authority may allow a payment described by Subsection (a) only to the extent that the regulatory authority finds the payment is reasonable and necessary for each item or class of items as determined by the commission.

(c) A finding under Subsection (b) must include:

(1) a specific finding of the reasonableness and necessity of each item or class of items allowed; and

(2) a finding that the price to the electric utility is not higher than the prices charged by the supplying affiliate for the same item or class of items to:

(A) its other affiliates or divisions; or

(B) a nonaffiliated person within the same market area or having the same market conditions.

(d) In making a finding regarding an affiliate transaction, the regulatory authority shall:

(1) determine the extent to which the conditions and circumstances of that transaction are reasonably comparable relative to quantity, terms, date of contract, and place of delivery; and

(2) allow for appropriate differences based on that determination.

(e) This section does not require a finding to be made before payments made by an electric utility to an affiliate are included in the utility's charges to consumers if there is a mechanism for making the charges subject to refund pending the making of the finding.

(f) If the regulatory authority finds that an affiliate expense for the test period is unreasonable, the regulatory authority shall:

(1) determine the reasonable level of the expense; and

(2) include that expense in determining the electric utility's cost of service.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997. Amended by Acts 1999, 76th Leg., ch. 405, Sec. 25, eff. Sept. 1, 1999.

Amended by:

Acts 2005, 79th Leg., Ch. 413 (S.B. 1668), Sec. 1, eff. June 17, 2005.

Notes of Decisions
Cited in 8 cases, 2001–2015 · leading case: Cent. Power & Light Co./Cities of Alice v. Pub. Util. Comm'n, 36 S.W.3d 547 (Tex. App.—Austin 2001).
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Cent. Power & Light Co./Cities of Alice v. Pub. Util. Comm'n, 36 S.W.3d 547 (Tex. App.—Austin 2001). · cites it 2× “Laws 31 , 55 (now codified at Tex. Util.Code Ann. § 36.058). 20 . It is undisputed that the Commission made this finding of fact, as will be discussed infra.”
CenterPoint Energy Houston Elec., LLC v. Pub. Util. Comm'n, 212 S.W.3d 389 (Tex. App.—Austin 2006). “at 412 ; see Tex. Util.Code Ann. § 36.058(c)(2) (West Supp.”
Entergy Texas, Inc. v. Pub. Util. Comm'n of Texas, No. 03-14-00706-CV (Tex. App.—Austin Mar. 6, 2015). · cites it 5× “Regarding depreciation of Service Company’s assets, the Court should uphold the Commission’s factual determination that Entergy failed to provide evidence sufficient to meet the level of scrutiny that applies to 109 Tex.”
Cities of Corpus Christi // AEP Texas Cent. Co. v. Pub. Util. Comm'n of Texas // Cities of Corpus Christi, No. 03-06-00585-CV, 2008 WL 615417 (Tex. App.—Austin Mar. 5, 2008). · cites it 3× “See Tex. Util. Code Ann. § 36.058 (West 2007).”
Cities of Corpus Christi // AEP Texas Cent. Co. v. Pub. Util. Comm'n of Texas // Cities of Corpus Christi, No. 03-06-00585-CV (Tex. App.—Austin Mar. 5, 2008). · cites it 2× “See Tex. Util. Code Ann. § 36.058 (West 2007).”
Entergy Texas, Inc. v. Pub. Util. Comm'n of Texas, No. 03-14-00706-CV (Tex. App.—Austin Apr. 27, 2015). · cites it 2× “5, 9, 27 Tex. Util. Code Ann. § 36.058 ...........”
Centerpoint Energy Houston Elec., LLC v. Pub. Util. Comm'n of Texas & City of Houston, No. 03-05-00565-CV (Tex. App.—Austin June 2, 2006). “And this higher level of scrutiny for affiliates is not the standard applied to arm's length transactions with third parties such as CPS. The record does not show--and the Commission does not argue--that power and fuel were purchased from third parties when the fuel was not…”
Centerpoint Energy Houston Elec., LLC v. Pub. Util. Comm'n of Texas & City of Houston, No. 03-05-00565-CV (Tex. App.—Austin June 2, 2006). “And this higher level of scrutiny for affiliates is not the standard applied to arm’s length transactions with third parties such as CPS. The record does not show—and the Commission does not argue—that power and fuel were purchased from third parties when the fuel was not…”
Tex. Util. Code § 36.058(c)(2): 2 cases
CenterPoint Energy Houston Elec., LLC v. Pub. Util. Comm'n, 212 S.W.3d 389 (Tex. App.—Austin 2006). “at 412 ; see Tex. Util.Code Ann. § 36.058(c)(2) (West Supp.”
Entergy Texas, Inc. v. Pub. Util. Comm'n of Texas, No. 03-14-00706-CV (Tex. App.—Austin Mar. 6, 2015). “Regarding depreciation of Service Company’s assets, the Court should uphold the Commission’s factual determination that Entergy failed to provide evidence sufficient to meet the level of scrutiny that applies to 109 Tex.”
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