Texas Codes

Tex. Util. Code § 39.051 (2026)

Unbundling

✓ current as of May 2026

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Sec. 39.051. UNBUNDLING. (a) On or before September 1, 2000, each electric utility shall separate from its regulated utility activities its customer energy services business activities that are otherwise also already widely available in the competitive market.

(b) Not later than January 1, 2002, each electric utility shall separate its business activities from one another into the following units:

(1) a power generation company;

(2) a retail electric provider; and

(3) a transmission and distribution utility.

(c) An electric utility may accomplish the separation required by Subsection (b) either through the creation of separate nonaffiliated companies or separate affiliated companies owned by a common holding company or through the sale of assets to a third party. An electric utility may create separate transmission and distribution utilities. Notwithstanding any other provision of this chapter, an electric utility that does not have stranded costs described by Section 39.254 and that on September 1, 2005, has not finalized unbundling pursuant to a commission order approving an unbundling plan may also meet the requirements of Subsection (b) for generation facilities existing on September 1, 2005, in the Electric Reliability Council of Texas if it meets and maintains compliance with the following requirements:

(1) the electric utility has no more than 400 megawatts of Texas jurisdictional capacity from generating units within the Electric Reliability Council of Texas that have not been mothballed or retired;

(2) the electric utility has a contract or contracts with separate nonaffiliated companies or separate affiliated companies for the sale of all of the output from its generating units that have not been mothballed or retired with a contract term that is no shorter than 20 years or the life of the generating units, whichever is shorter; and

(3) the electric utility has a separate division within the electric utility for its generation business activities.

(c-1) A separate division described by Subsection (c)(3) is subject to Subsection (d) and, for the purposes of this chapter, is considered a separate affiliated power generation company and a competitive affiliate.

(d) Each electric utility shall unbundle under this section in a manner that provides for a separation of personnel, information flow, functions, and operations, consistent with Section 39.157(d).

(e) Each electric utility shall file with the commission a plan to implement this section by January 10, 2000.

(f) The commission shall adopt the utility's plan for business separation required by Subsection (b), adopt the plan with changes, or reject the plan and require the utility to file a new plan.

(g) Transactions by electric utilities involving sales, transfers, or other disposition of assets to accomplish the purposes of this section are not subject to Section 14.101, 35.034, or 35.035.

Added by Acts 1999, 76th Leg., ch. 405, Sec. 39, eff. Sept. 1, 1999.

Amended by:

Acts 2005, 79th Leg., Ch. 413 (S.B. 1668), Sec. 3, eff. June 17, 2005.

Notes of Decisions

Cited in 56 cases (4 in the last 5 years), 2001–2024 · leading case: Triton 88, L.P. F/K/A Triton 88, L.L.C & Triton 2000, L.L.C. v. Star Elec. , L.L.C. D/B/A Startex Power, 411 S.W.3d 42 (Tex. App. 2013).

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Triton 88, L.P. F/K/A Triton 88, L.L.C & Triton 2000, L.L.C. v. Star Elec. , L.L.C. D/B/A Startex Power, 411 S.W.3d 42 (Tex. App. 2013). · cites it 4× “See Tex. Util. Code Ann. § 39.051 (a) (Vernon 2007) (“On or before September 1, 2000, each electric utility shall separate from its regulated utility activities its customer energy services business activities that are otherwise also widely available in the competitive market.”

Texas Mun. Power Agency v. Pub. Util. Comm'n of Texas, 253 S.W.3d 184 (Tex. 2007). “Tex. Util.Code §§ 39.051, 39.203. Chapter 40 clarifies the role of MOUs in the newly deregulated market.”

Cities of Corpus Christi v. Pub. Util. Comm'n, 188 S.W.3d 681 (Tex. App. 2005). · cites it 2× “Tex. Util.Code Ann. § 39.051(b). Power generation companies provide wholesale *685 generation services in competition with other generators entering the market.”

City of Richardson v. Oncor Elec. Delivery Co., 539 S.W.3d 252 (Tex. 2018). “3 TEX. UTIL. CODE § 39.051(b). Under PURA, TDUs continue to be regulated by the PUC following deregulation.”

In Re TXU Elec. Co., 67 S.W.3d 130 (Tex. 2001). · cites it 2× “Tex. Util. Code § 39.051(b). After January 1, 2002, the generating company will own and operate the generating plants, the transmission and delivery company will deliver the electricity over transmission and distribution lines, and the retail electric provider will sell…”

Oncor Elec. Delivery Co. LLC v. Pub. Util. Comm'n of Texas, 507 S.W.3d 706 (Tex. 2017). · cites it 2× “Comm’n of Tex, Report To the 84th Legislature; Scope of Competition in Electric Markets in Texas 19, 44 n.”

Pub. Util. Comm'n v. Cities of Harlingen, 311 S.W.3d 610 (Tex. App. 2010). · cites it 2× “See Tex. Util.Code Ann. § 39.051(b) (West 2007).”

CenterPoint Energy Houston Elec., LLC v. Gulf Coast Coalition of Cities, 252 S.W.3d 1 (Tex. App. 2008). “Significantly, the formerly integrated utilities were required to “unbundle” and divide into three separate entities: (1) retail electric providers, (2) power-generation companies, and (3) transmission-and-distribution utilities.”

Texas Indus. Energy Consumers v. Centerpoint Energy Houston Elec., LLC Pub. Util. Comm'n of Texas, 324 S.W.3d 95 (Tex. 2010). “Tex. Util.Code § 39.051(b). 4 . Id. § 39.”

Steering Committees for the Cities Served by TXU Elec. v. Pub. Util. Comm'n, 42 S.W.3d 296 (Tex. App. 2001). “2 See Public Utility Regulatory Act (PURA), Tex.Util.Code Ann. § 39.051(b) (West Supp.”

Off. of Pub. Util. Couns. v. Pub. Util. Comm'n, 104 S.W.3d 225 (Tex. App. 2003). “See Tex. UtiLCode Ann. § 39.051(b). When the transmission, generation, and retail activities of a former monopoly utility continue to be held by a common holding company, the resulting REP is known as an “affiliated REP.”

State v. Pub. Util. Com'n of Texas, 344 S.W.3d 349 (Tex. 2011). “Tex. Util.Code § 39.051(b). 5 . Id. § 39.”

Show all 56 citing cases →

— Tex. Util. Code § 39.051(a) — 6 cases

Nucor Steel-Texas v. Pub. Util. Comm'n, 363 S.W.3d 871 (Tex. App. 2012).

Noah S. Bunker, Paul Carrell, Everett Brew Houston, Jr., W. Andrew Buchholz, Scott J. Leighty, Jad L. Davis, & Holly Clause v. Tracy D. Strandhagen (Tex. App. 2015).

Dos Republicas Coal P'ship v. David Saucedo, as Floodplain Adm'r & Cnty. Judge of the Maverick Cnty. Commissioners Court, & the Maverick Cnty. Commissioners Court (Tex. App. 2015).

— Tex. Util. Code § 39.051(b) — 20 cases

Cities of Corpus Christi v. Pub. Util. Comm'n, 188 S.W.3d 681 (Tex. App. 2005). “Tex. Util.Code Ann. § 39.051(b). Power generation companies provide wholesale *685 generation services in competition with other generators entering the market.”

City of Richardson v. Oncor Elec. Delivery Co., 539 S.W.3d 252 (Tex. 2018). “3 TEX. UTIL. CODE § 39.051(b). Under PURA, TDUs continue to be regulated by the PUC following deregulation.”

In Re TXU Elec. Co., 67 S.W.3d 130 (Tex. 2001). “Tex. Util. Code § 39.051(b). After January 1, 2002, the generating company will own and operate the generating plants, the transmission and delivery company will deliver the electricity over transmission and distribution lines, and the retail electric provider will sell…”

Oncor Elec. Delivery Co. LLC v. Pub. Util. Comm'n of Texas, 507 S.W.3d 706 (Tex. 2017). “Comm’n of Tex, Report To the 84th Legislature; Scope of Competition in Electric Markets in Texas 19, 44 n.”

Triton 88, L.P. F/K/A Triton 88, L.L.C & Triton 2000, L.L.C. v. Star Elec. , L.L.C. D/B/A Startex Power, 411 S.W.3d 42 (Tex. App. 2013). “See Tex. Util. Code Ann. § 39.051 (a) (Vernon 2007) (“On or before September 1, 2000, each electric utility shall separate from its regulated utility activities its customer energy services business activities that are otherwise also widely available in the competitive market.”

— Tex. Util. Code § 39.051(c) — 2 cases

AEP Texas Com. & Indus. Retail Ltd. P'ship v. Pub. Util. Comm'n, 436 S.W.3d 890 (Tex. App. 2014).

AEP Texas Com. & Indus. Retail Ltd. P'ship v. Pub. Util. Comm'n of Texas All. for Retail Markets Texas Energy Ass'n for Marketers CPL Retail Energy, LP WTU Retail Energy, LP & Direct Energy Bus., LLC \Permanent Archive Case\" \"Permanent Archive Case\"" (Tex. App. 2014).

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