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 § 39.254 (2026)

Use Of Revenues For Utilities With Stranded Costs

✓ current as of May 2026
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Sec. 39.254. USE OF REVENUES FOR UTILITIES WITH STRANDED COSTS. This subchapter provides a number of tools to an electric utility to mitigate stranded costs. Each electric utility that was reported by the commission to have positive "excess costs over market" (ECOM), denoted as the "base case" for the amount of stranded costs before full retail competition in 2002 with respect to its Texas jurisdiction, in the April 1998 Report to the Texas Senate Interim Committee on Electric Utility Restructuring entitled "Potentially Strandable Investment (ECOM) Report: 1998 Update," must use these tools to reduce the net book value of, otherwise referred to as "accelerate" the cost recovery of, its stranded costs each year. Any positive difference under the report required by Section 39.257(b) shall be applied to the net book value of generation assets.

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

Notes of Decisions
Cited in 13 cases, 2001–2011 · leading case: In Re TXU Elec. Co., 67 S.W.3d 130 (Tex. 2001).
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In Re TXU Elec. Co., 67 S.W.3d 130 (Tex. 2001). · cites it 9× “Tex. Util.Code §§ 39.254. Under the second phase, from January 1, 2002, to December 31, 2003, the Commission is to consider remaining stranded costs in setting the "competition transition charge" or "CTC.”
CenterPoint Energy Houston Elec., LLC v. Gulf Coast Coalition of Cities, 252 S.W.3d 1 (Tex. App. 2008). · cites it 5× “Tex. Util.Code Ann. § 39.254; CenterPoint Energy, Inc.”
Cities of Corpus Christi v. Pub. Util. Comm'n, 188 S.W.3d 681 (Tex. App. 2005). · cites it 2× “Tex. Util.Code Ann. § 39.254. It then provided "a number of tools to an electric utility to mitigate stranded costs" between 1999 and the 2004 true-up.”
State v. Pub. Util. Com'n of Texas, 344 S.W.3d 349 (Tex. 2011). “; Tex. Util.Code §§ 39.254, .262(1). 16 . See Tex.”
State ex rel. Off. of the Attorney Gen. v. Pub. Util. Comm'n of Texas, 246 S.W.3d 324 (Tex. App. 2008). “6 million in excess earnings for 1999-2001 was reasonable and comports with the Commission’s obligation to ensure that TNMP applies its excess earnings to reduce net book value and does not overrecover stranded costs.”
Centerpoint Energy Houston Elec., LLC & Texas Genco, LP // Cross Gulf Coast Coalition of Cities, Houston Council for Health & Educ., City of Houston, Coalition of Cities v. Pub. Util. Comm'n of Texas, Off. of Pub. Util. Couns., Gulf Coast Coalition of Cities, City of Houston, Texas Indus. Energy Consumers, Houston Council for Health & Educ., State of Texas, Occidental Power Mktg., L.P. (Tex. App. 2007). · cites it 5× “Tex. Util. Code Ann. § 39.254 ; CenterPoint Energy, Inc.”
Centerpoint Energy Houston Elec., LLC & Texas Genco, LP // Cross Gulf Coast Coalition of Cities, Houston Council for Health & Educ., City of Houston, Coalition of Cities v. Pub. Util. Comm'n of Texas, Off. of Pub. Util. Couns., Gulf Coast Coalition of Cities, City of Houston, Texas Indus. Energy Consumers, Houston Council for Health & Educ., State of Texas, Occidental Power Mktg., L.P. (Tex. App. 2007). · cites it 5× “Tex. Util. Code Ann. § 39.254 (West 2007).”
Centerpoint Energy Houston Elec., LLC & Texas Genco, LP // Cross Gulf Coast Coalition of Cities, Houston Council for Health & Educ., City of Houston, Coalition of Cities v. Pub. Util. Comm'n of Texas, Off. of Pub. Util. Couns., Gulf Coast Coalition of Cities, City of Houston, Texas Indus. Energy Consumers, Houston Council for Health & Educ., State of Texas, Occidental Power Mktg., L.P. (Tex. App. 2008). · cites it 5× “Tex. Util. Code Ann. § 39.254 (West 2007).”
Centerpoint Energy Houston Elec., LLC & Texas Genco, LP // Cross Gulf Coast Coalition of Cities, Houston Council for Health & Educ., City of Houston, Coalition of Cities v. Pub. Util. Comm'n of Texas, Off. of Pub. Util. Couns., Gulf Coast Coalition of Cities, City of Houston, Texas Indus. Energy Consumers, Houston Council for Health & Educ., State of Texas, Occidental Power Mktg., L.P. (Tex. App. 2008). · cites it 5× “Tex. Util. Code Ann. § 39.254 ; CenterPoint Energy, Inc.”
State v. Pub. Util. Com's of Texas, 246 S.W.3d 324 (Tex. App. 2008). “6 million in excess earnings for 1999-2001 was reasonable and comports with the Commission's obligation to ensure that TNMP applies its excess earnings to reduce net book value and does not overrecover stranded costs.”
Cities of Corpus Christi, Appellants//AEP Texas Cent. Co. Pub. Util. Comm'n of Texas & Constellation New Energy, Inc. v. Pub. Util. Comm'n of Texas & AEP Texas Cent. Co., Appellees//Pub. Util. Comm'n of Texas Cities of Corpus Christi Off. of Pub. Util. Couns. & Constellation NewEnergy, Inc. (Tex. App. 2005). “Tex. Util. Code Ann. § 39.254 . It then provided "a number of tools to an electric utility to mitigate stranded costs" between 1999 and the 2004 true-up.”
State v. Pub. Util. Comm'n of Texas, Represented by the Off. of the Attorney Gen., Nat. Resources Div. & Texas Indus. Energy Consumers (Tex. App. 2008). “6 million in excess earnings for 1999-2001 was reasonable and comports with the Commission's obligation to ensure that TNMP applies its excess earnings to reduce net book value and does not overrecover stranded costs.”
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