Tex. Codes » Utilities Code · TITLE 2. PUBLIC UTILITY REGULATORY ACT · SUBTITLE B. ELECTRIC UTILITIES · CHAPTER 39. RESTRUCTURING OF ELECTRIC UTILITY INDUSTRY
Texas Codes

Tex. Util. Code § 39.251 (2026)

Definitions

✓ current as of May 2026
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Sec. 39.251. DEFINITIONS. In this subchapter:

(1) "Above market purchased power costs" means wholesale demand and energy costs that a utility is obligated to pay under an existing purchased power contract to the extent the costs are greater than the purchased power market value.

(2) "Existing purchased power contract" means a purchased power contract in effect on January 1, 1999, including any amendments and revisions to that contract resulting from litigation initiated before January 1, 1999.

(3) "Generation assets" means all assets associated with the production of electricity, including generation plants, electrical interconnections of the generation plant to the transmission system, fuel contracts, fuel transportation contracts, water contracts, lands, surface or subsurface water rights, emissions-related allowances, and gas pipeline interconnections.

(4) "Market value" means, for nonnuclear assets and certain nuclear assets, the value the assets would have if bought and sold in a bona fide third-party transaction or transactions on the open market under Section 39.262(h) or, for certain nuclear assets, as described by Section 39.262(i), the value determined under the method provided by that subsection.

(5) "Purchased power market value" means the value of demand and energy bought and sold in a bona fide third-party transaction or transactions on the open market and determined by using the weighted average costs of the highest three offers from the market for purchase of the demand and energy available under the existing purchased power contracts.

(6) "Retail stranded costs" means that part of net stranded cost associated with the provision of retail service.

(7) "Stranded cost" means the positive excess of the net book value of generation assets over the market value of the assets, taking into account all of the electric utility's generation assets, any above market purchased power costs, and any deferred debit related to a utility's discontinuance of the application of Statement of Financial Accounting Standards No. 71 ("Accounting for the Effects of Certain Types of Regulation") for generation-related assets if required by the provisions of this chapter. For purposes of Section 39.262, book value shall be established as of December 31, 2001, or the date a market value is established through a market valuation method under Section 39.262(h), whichever is earlier, and shall include stranded costs incurred under Section 39.263.

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

Notes of Decisions
Cited in 37 cases, 2001–2011 · leading case: Reliant Energy, Inc. v. Pub. Util. Comm'n, 101 S.W.3d 129 (Tex. App. 2003).
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Reliant Energy, Inc. v. Pub. Util. Comm'n, 101 S.W.3d 129 (Tex. App. 2003). · cites it 4× “In the first stage, from September 1999 to December 2001, the Commission froze retail electric rates. See Tex.”
In Re TXU Elec. Co., 67 S.W.3d 130 (Tex. 2001). · cites it 4× “Underpinning the Legislature's decision to restructure the electric power industry was its finding that regulation was no longer warranted, except for regulating transmission of electricity and overseeing the recovery of stranded costs.”
City of Corpus Christi v. Pub. Util. Comm'n of Texas, 51 S.W.3d 231 (Tex. 2001). · cites it 2× “[85] TEX. UTIL.CODE § 39.251(3), (7). [86] See State v.”
CenterPoint Energy Houston Elec., LLC v. Gulf Coast Coalition of Cities, 252 S.W.3d 1 (Tex. App. 2008). · cites it 3× “Tex. Util. Code Ann. §§ 39.251 (7), .252(a), .”
Cities of Corpus Christi v. Pub. Util. Comm'n, 188 S.W.3d 681 (Tex. App. 2005). · cites it 3× “See Tex. Util.Code Ann. § 39.251(7) (West Supp.”
AEP Texas Cent. Co. v. Pub. Util. Comm'n of Texas, 258 S.W.3d 272 (Tex. App. 2008). · cites it 8× “Tex. Util. Code Ann. § 39.251 (7). The parties raise several challenges to the Commission's determinations regarding both the market value and net book value of TCC's generation assets.”
Centerpoint Energy, Inc. v. Pub. Util. Comm'n, 143 S.W.3d 81 (Tex. 2004). · cites it 2× “[6] See TEX. UTIL.CODE § 39.251(7); In re TXU Elec.”
State v. Pub. Util. Com'n of Texas, 344 S.W.3d 349 (Tex. 2011). “Tex. Util.Code § 39.251(7) (emphasis added).”
State ex rel. Off. of the Attorney Gen. v. Pub. Util. Comm'n of Texas, 246 S.W.3d 324 (Tex. App. 2008). · cites it 3× “at- -, 2007 WL 4462349 at *20, *62-*63 (citing Tex. UtiLCode Ann. § 39.251(4)). In the absence of a market valuation established under one of the prescribed methods in section 39.”
Gulf Coast Coalition of Cities v. Pub. Util. Comm'n, 161 S.W.3d 706 (Tex. App. 2005). “for generation-related assets_” Tex. Util. Code Ann. § 39.251 (7) (West Supp.”
Centerpoint Energy Houston Elec., LLC v. Gulf Coast Coalition of Cities, 263 S.W.3d 448 (Tex. App. 2008). “denied); see Tex. Util.Code Ann. § 39.251(7) (West 2007), 3 thereby “stranding” costs of the utility’s prior investments in generation assets that the utility had made with the expectation of recovering (and would have recovered) under the pri- or rate-regulated regime.”
Off. of Pub. Util. Couns. v. Pub. Util. Comm'n, 303 S.W.3d 904 (Tex. App. 2010). · cites it 2× “” Tex. Util. Code Ann. § 39.251 (7). As previously discussed, both of these amounts must be quantified as of December 31, 2001.”
Show all 37 citing cases →
— Tex. Util. Code § 39.251(3) — 1 case
City of Corpus Christi v. Pub. Util. Comm'n of Texas, 51 S.W.3d 231 (Tex. 2001). “[85] TEX. UTIL.CODE § 39.251(3), (7). [86] See State v.”
— Tex. Util. Code § 39.251(4) — 3 cases
State ex rel. Off. of the Attorney Gen. v. Pub. Util. Comm'n of Texas, 246 S.W.3d 324 (Tex. App. 2008). “at- -, 2007 WL 4462349 at *20, *62-*63 (citing Tex. UtiLCode Ann. § 39.251(4)). In the absence of a market valuation established under one of the prescribed methods in section 39.”
AEP Texas Cent. Co. v. Pub. Util. Comm'n, 345 S.W.3d 60 (Tex. 2011).
State v. Pub. Util. Com's of Texas, 246 S.W.3d 324 (Tex. App. 2008).
— Tex. Util. Code § 39.251(6) — 1 case
Off. of Pub. Util. Couns. v. Pub. Util. Comm'n, 303 S.W.3d 904 (Tex. App. 2010). “” Tex. Util. Code Ann. § 39.251 (7). As previously discussed, both of these amounts must be quantified as of December 31, 2001.”
— Tex. Util. Code § 39.251(7) — 9 cases
Reliant Energy, Inc. v. Pub. Util. Comm'n, 101 S.W.3d 129 (Tex. App. 2003). “In the first stage, from September 1999 to December 2001, the Commission froze retail electric rates. See Tex.”
In Re TXU Elec. Co., 67 S.W.3d 130 (Tex. 2001). “Underpinning the Legislature's decision to restructure the electric power industry was its finding that regulation was no longer warranted, except for regulating transmission of electricity and overseeing the recovery of stranded costs.”
Cities of Corpus Christi v. Pub. Util. Comm'n, 188 S.W.3d 681 (Tex. App. 2005). “See Tex. Util.Code Ann. § 39.251(7) (West Supp.”
Centerpoint Energy, Inc. v. Pub. Util. Comm'n, 143 S.W.3d 81 (Tex. 2004). “[6] See TEX. UTIL.CODE § 39.251(7); In re TXU Elec.”
CenterPoint Energy Houston Elec., LLC v. Gulf Coast Coalition of Cities, 252 S.W.3d 1 (Tex. App. 2008). “Tex. Util. Code Ann. §§ 39.251 (7), .252(a), .”
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