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

Tex. Util. Code § 36.060 (2026)

Consolidated Income Tax Returns

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Sec. 36.060. CONSOLIDATED INCOME TAX RETURNS.

(a) If an expense is allowed to be included in utility rates or an investment is included in the utility rate base, the related income tax benefit must be included in the computation of income tax expense to reduce the rates. If an expense is not allowed to be included in utility rates or an investment is not included in the utility rate base, the related income tax benefit may not be included in the computation of income tax expense to reduce the rates. The income tax expense shall be computed using the statutory income tax rates.

(b) The amount of income tax that a consolidated group of which an electric utility is a member saves, because the consolidated return eliminates the intercompany profit on purchases by the utility from an affiliate, shall be applied to reduce the cost of the property or service purchased from the affiliate.

(c) The investment tax credit allowed against federal income taxes, to the extent retained by the electric utility, shall be applied as a reduction in the rate-based contribution of the assets to which the credit applies, to the extent and at the rate allowed by the Internal Revenue Code.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.

Amended by:

Acts 2013, 83rd Leg., R.S., Ch. 787 (S.B. 1364), Sec. 1, eff. September 1, 2013.

Notes of Decisions
Cited in 4 cases, 2008–2010 · leading case: 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).
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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). “Tex. Util. Code Ann. § 36.060 (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). “Tex. Util. Code Ann. § 36.060 (West 2007).”
Cities of Corpus Christi & Off. of Pub. Util. Couns. v. Pub. Util. Comm'n of Texas & AEP Texas Cent. Co., No. 03-09-00116-CV (Tex. App.—Austin June 11, 2010). “Tex. Util. Code Ann. § 36.060 (West 2007).”
Cities of Corpus Christi & Off. of Pub. Util. Couns. v. Pub. Util. Comm'n of Texas & AEP Texas Cent. Co., No. 03-09-00116-CV (Tex. App.—Austin June 11, 2010). “Tex. Util. Code Ann. § 36.060 (West 2007).”
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