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 § 39.302 (2026)

Definitions

✓ current as of May 2026
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Sec. 39.302. DEFINITIONS. In this subchapter:

(1) "Assignee" means any individual, corporation, or other legally recognized entity to which an interest in transition property is transferred, other than as security, including any assignee of that party.

(2) "Financing order" means an order of the commission adopted under Section 39.201 or 39.262 approving the issuance of transition bonds and the creation of transition charges for the recovery of qualified costs.

(3) "Financing party" means a holder of transition bonds, including trustees, collateral agents, and other persons acting for the benefit of the holder.

(4) "Qualified costs" means 100 percent of an electric utility's regulatory assets and 75 percent of its recoverable costs determined by the commission under Section 39.201 and any remaining amounts determined under Section 39.262 together with the costs of issuing, supporting, and servicing transition bonds and any costs of retiring and refunding the electric utility's existing debt and equity securities in connection with the issuance of transition bonds. The term includes the costs to the commission of acquiring professional services for the purpose of evaluating proposed transactions under Section 39.201 and this subchapter.

(5) "Regulatory assets" means the generation-related portion of the Texas jurisdictional portion of the amount reported by the electric utility in its 1998 annual report on Securities and Exchange Commission Form 10-K as regulatory assets and liabilities, offset by the applicable portion of generation-related investment tax credits permitted under the Internal Revenue Code of 1986.

(6) "Transition bonds" means bonds, debentures, notes, certificates of participation or of beneficial interest, or other evidences of indebtedness or ownership that are issued by an electric utility, its successors, or an assignee under a financing order, that have a term not longer than 15 years, and that are secured by or payable from transition property. If certificates of participation, beneficial interest, or ownership are issued, references in this subchapter to principal, interest, or premium shall refer to comparable amounts under those certificates.

(7) "Transition charges" means nonbypassable amounts to be charged for the use or availability of electric services, approved by the commission under a financing order to recover qualified costs, that shall be collected by an electric utility, its successors, an assignee, or other collection agents as provided for in the financing order.

(8) "Transition property" means the property described in Section 39.304.

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

Amended by:

Acts 2007, 80th Leg., R.S., Ch. 1186 (H.B. 624), Sec. 3, eff. June 15, 2007.

Notes of Decisions
Cited in 11 cases, 2001–2014 · leading case: City of Corpus Christi v. Pub. Util. Comm'n of Texas, 51 S.W.3d 231 (Tex. 2001).
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City of Corpus Christi v. Pub. Util. Comm'n of Texas, 51 S.W.3d 231 (Tex. 2001). · cites it 2× “[87] TEX. UTIL.CODE § 39.302(5). [88] Campaign for Ratepayers Rights, 766 A.”
Centerpoint Energy, Inc. v. Pub. Util. Comm'n, 143 S.W.3d 81 (Tex. 2004). · cites it 2× “[28] TEX. UTIL.CODE § 39.302(5). [29] City of Corpus Christi, 51 S.”
In Re TXU Elec. Co., 67 S.W.3d 130 (Tex. 2001). · cites it 2× “, Tex. Util.Code § 39.302(5) (limiting "regulatory assets" to those reported by utilities in 1998 Form 10 K); City of Corpus Christi v.”
AEP Texas Com. & Indus. Retail Ltd. P'ship v. Pub. Util. Comm'n, 436 S.W.3d 890 (Tex. App. 2014). “302 (requiring PUC to implement an education program to inform customers "about changes in the provision of electric service resulting from the opening of the retail electric market and the customer choice pilot program under this chapter”). . Tex.”
Centerpoint Energy Houston Elec., LLC v. Gulf Coast Coalition of Cities, 263 S.W.3d 448 (Tex. App. 2008). “CenterPoint proceeded to obtain Commission approval to recover approximately $570 million of its “non-stranded” costs not then subject to securitization through a CTC. This amount reflected CenterPoint’s capacity auction true-up amount, which was positive; net of its final fuel…”
CenterPoint Energy Houston Elec., LLC & Pub. Util. Comm'n of Texas v. Gulf Coast Coalition of Cities, Texas Indus. Energy Consumers, the State of Texas & Occidental Power Mktg., L.P. (Tex. App. 2008). “See Tex. Util. Code Ann. § 39.302 (4) (West 2007).”
CenterPoint Energy Houston Elec., LLC & Pub. Util. Comm'n of Texas v. Gulf Coast Coalition of Cities, Texas Indus. Energy Consumers, the State of Texas & Occidental Power Mktg., L.P. (Tex. App. 2008). “See Tex. Util. Code Ann. § 39.302 (4) (West 2007).”
Senna Hills, Ltd. & HBH Dev. Co., LLC v. Sonterra Energy Corp. (Tex. App. 2010). “See Tex. Util. Code Ann. § 39.302 (4). Like interest, up-front qualified costs are not part of the net book value of generation assets or the market value of generation assets, and therefore do not fall under the statutory definition of stranded costs.”
Off. of Pub. Util. Couns. & Texas Indus. Energy Consumers// Pub. Util. Comm'n of Texas v. Pub. Util. Comm'n of Texas// Off. of Pub. Util. Couns. & Texas Indus. Energy Consumers (Tex. App. 2010). “See Tex. Util. Code Ann. § 39.302 (4). Like interest, up-front qualified costs are not part of the net book value of generation assets or the market value of generation assets, and therefore do not fall under the statutory definition of stranded costs.”
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). “Appellees answer that whether shared branding amounts to prohibited preferential joint advertising or promotion, both at the inception of competition and today, turns on the specific factual 111 See Tex. Util. Code § 39.302 (requiring PUC to implement an education program to…”
Untitled Texas Attorney Gen. Opinion (Tex. Att'y Gen. 2012). “01(2) (West 2009) (defining "assignee" as "an assignee for the benefit of creditors"); TEx. UTIL. CODE ANN. § 39.302(1) (West Supp.”
— Tex. Util. Code § 39.302(1) — 1 case
Untitled Texas Attorney Gen. Opinion (Tex. Att'y Gen. 2012). “01(2) (West 2009) (defining "assignee" as "an assignee for the benefit of creditors"); TEx. UTIL. CODE ANN. § 39.302(1) (West Supp.”
— Tex. Util. Code § 39.302(4) — 1 case
Centerpoint Energy Houston Elec., LLC v. Gulf Coast Coalition of Cities, 263 S.W.3d 448 (Tex. App. 2008). “CenterPoint proceeded to obtain Commission approval to recover approximately $570 million of its “non-stranded” costs not then subject to securitization through a CTC. This amount reflected CenterPoint’s capacity auction true-up amount, which was positive; net of its final fuel…”
— Tex. Util. Code § 39.302(5) — 3 cases
City of Corpus Christi v. Pub. Util. Comm'n of Texas, 51 S.W.3d 231 (Tex. 2001). “[87] TEX. UTIL.CODE § 39.302(5). [88] Campaign for Ratepayers Rights, 766 A.”
Centerpoint Energy, Inc. v. Pub. Util. Comm'n, 143 S.W.3d 81 (Tex. 2004). “[28] TEX. UTIL.CODE § 39.302(5). [29] City of Corpus Christi, 51 S.”
In Re TXU Elec. Co., 67 S.W.3d 130 (Tex. 2001). “, Tex. Util.Code § 39.302(5) (limiting "regulatory assets" to those reported by utilities in 1998 Form 10 K); City of Corpus Christi v.”
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