TITLE 16. ECONOMIC REGULATION

PART 2. PUBLIC UTILITY COMMISSION OF TEXAS

CHAPTER 22. PROCEDURAL RULES

The Public Utility Commission of Texas (commission) proposes 16 amendments in the Chapter 22 procedural rules. The scope of this rulemaking proceeding is limited to consideration of the proposed rule amendments, additional modifications to these rules that are reasonably related to the proposed changes, and other minor and nonsubstantive amendments. Substantive amendments to these rules not related to the proposed changes are not within the scope of this proceeding.

The proposed amendments are listed in order as follows (Subchapters K-O): Subchapter K, §22.201, Place and Nature of Hearings, §22.204, relating to Transcript and Record, §22.205, relating to Briefs, §22.207, relating to Referral to State Office of Administrative Hearings; Subchapter L, §22.221, relating to Rules of Evidence in Contested Cases, §22.225, relating to Written Testimony and Accompanying Exhibits, §22.228, relating to Stipulation of Facts; Subchapter M, §22.241, relating to Investigations, §22.244, relating to Review of Municipal Rate Actions, §22.246, relating to Administrative Penalties; Subchapter N, §22.261, relating to Proposals for Decision, §22.262, relating to Commission Action After a Proposal for Decision, §22.263, relating to Final Orders, §22.264, relating to Rehearing Subchapter O, §22.281, relating to Initiation of Rulemaking, and §22.282, relating to Notice and Public Participation in Rulemaking Procedures.

Rule Review Stakeholder Recommendations

On May 3, 2025, commission staff filed a preliminary notice and request for comments which was published in the Texas Register on May 17, 2024, at 49 TexReg 3635. Comments were received from the Alliance for Retail Markets (ARM) and the Texas Energy Association for Marketers (TEAM), collectively (REP Coalition); Entergy Texas, Inc. (Entergy); the Lower Colorado River Authority and LCRA Transmission Services Corporation (LCRA); the Office of Public Utility Counsel (OPUC); Oncor Electric Delivery Company, LLC (Oncor); the Steering Committee of Cities Served by Oncor (OCSC); Texas Association of Water Companies, Inc. (TAWC); the Texas Rural Water Association (TRWA); Texas-New Mexico Power Company (TNMP); and Vistra Corporation (Vistra). Based upon filed comments and an internal review by commission staff, the commission proposes the following rule changes.

The proposed changes would amend §22.201, relating to Place and Nature of Hearings, to permit the presiding officer to authorize hearings and prehearing conferences to be conducted virtually and to require hearings held at the State Office of Administrative Hearings to be conducted in accordance with commission rules.

The proposed changes would amend §22.204, relating to Transcript and Record to, following an objection to a change to the record, require any change to the record to only be made as ordered by the presiding officer.

The proposed changes would amend §22.205, relating to Briefs, to require briefs to conform with the formatting requirements of §22.72, relating to Form Requirements for Documents Filed with the Commission, specify page number limitations with and without attachments, authorize the presiding officer to require parties to address certain issues or address issues in a specific order or format, and provide information regarding legal authorities that are not readily accessible by the commission.

The proposed changes would amend §22.207, relating to Referral to State Office of Administrative Hearings to specify that the utility division of SOAH will conduct prehearing conferences and hearings related to contested cases before the commission, other than a prehearing conference conducted by a commission administrative law judge or a hearing conducted by one or more commissioners.

The proposed changes would amend §22.221, relating to Rules of Evidence in Contested Cases to specify that testimony and responses to requests for information by an opposing party that an intervenor or commission staff plans to introduce as part of its direct case must be filed at the time the intervenor or commission staff files its written direct testimony. The proposed changes eliminate the requirement for the presiding officer to establish a date for filing of deposition testimony and requests for information that an applicant plans to introduce as part of its direct case. The proposed changes remove the requirement for deposition testimony and responses to requests for information that a party plans to introduce in support of its rebuttal case to be filed at the time the party files its written rebuttal testimony. The proposed changes also require utilities that file an application for a CCN or an amendment to a CCN for a new electric transmission facility to file written testimony and exhibits supporting its direct case on the same date that the application is filed with the commission. Additionally, the proposed changes specify that, for any contested case that is not a major rate proceeding nor a CCN or CCN amendment proceeding for an electric transmission facility, the prefiling of written testimony and exhibits at the time the filing is made is not required unless otherwise required by statute or rule. The proposed changes clarify that a witness must submit to cross-examination, clarifying questions, redirect examination, and recross-examination, unless the right to cross-examine the witness is waived by all parties and accepted by the presiding officer. The proposed changes also authorize the presiding officer to allow the substitution of a witness or voir dire examination where appropriate.

The proposed changes would amend §22.225, relating to Written Testimony and Accompanying Exhibits, to clarify that the requirement to file deposition testimony and responses to requests for information by an opposing party that is planned to be introduced as part of a direct case with written direct testimony applies to intervenors or commission staff. The proposed changes also entail clarifications regarding objections to rebuttal testimony, certain requirements for prefiled written testimony and exhibits for direct cases involving certificate of convenience and necessity (CCN) applications or CCN amendments, prefiled testimony requirements for contested cases that are neither major rate proceedings nor CCN or CCN amendment proceedings, and waiver of the right to cross-examine witnesses.

The proposed changes would amend §22.228, relating to Stipulation of Facts, to revise the term "settlement" with the term "stipulation."

The proposed changes would amend §22.241, relating to Investigations to specify that the commission may at any time institute formal investigations on its own motion, or the motion of commission staff, into any matter within the commission's jurisdiction.

The proposed changes would amend §22.244, relating to Review of Municipal Electric Rate Actions, to clarify references to the commission's Office of Policy and Docket Management.

The proposed changes would amend §22.246, relating to Administrative Penalties to authorize a notice of violation or continuing violation to be given by e-mail as an alternative to certified mail and, if such an e-mail does not exist, for the commission executive director or their designee to make reasonable efforts to notify the person who is alleged to have committed the violation. The proposed changes would also revise the calculation of load proportions for the distribution and disgorgement of excess revenue. Additionally, if the commission determines that wholesale electric market participants other than those specified by rule are affected by excess revenues, or a different distribution method of such revenues is appropriate, the revisions authorize the commission to require the independent organization to distribute excess revenues to affected wholesale market participants using a different distribution method in the same or subsequent proceeding.

The proposed changes would amend §22.261, relating to Proposals for Decision to authorize commission counsel, in addition to the presiding officer, to establish a deadline for submitting proposed corrections or clarifications and to direct or authorize parties to draft and submit proposed findings of fact and conclusions of law. The proposed changes would also authorize commission counsel or the presiding officer to specify a time period in which parties may file exceptions to a proposal for decision. The proposed changes would limit replies to be filed in response to filed exceptions. The proposed changes also authorize commission counsel or the presiding officer to require issues be addressed in a specified order or according to a specified format and, for good cause shown, to allow additional time to file exceptions or replies.

The proposed changes would amend §22.262, relating to Commission Action After a Proposal for Decision to extend the deadline to file a request for oral argument with the commission from 3:00 p.m. to 5:00 p.m. seven days before the open meeting at which the commission is scheduled to consider the case.

The proposed changes would amend §22.263, relating to Final Orders, to clarify that final order notification requirements will follow the Texas Administrative Procedure Act and §22.74, relating to Service of Pleadings and Documents, to the extent that §22.74 does not conflict with the APA.

The proposed changes would amend §22.264, relating to Rehearing, to clarify references to the commission's Office of Policy and Docket Management.

The proposed changes would amend §22.281, relating to Initiation of Rulemaking to clarify that suggested new rules or amendments that do not comply with the requirements of §22.281, including any rulemaking suggestion made in a contested case proceeding, would be construed as policy recommendations and would not be processed as a formal rulemaking petition. The proposed changes would require petitions for rulemaking to be submitted to a general project for petitions for rulemaking and provide that commission staff will open such a project each calendar year and post the control number on the commission's website. The proposed changes would further specify that commission staff may file a memo in the project for rulemaking petitions that establishes comment deadlines for responding to a petition for rulemaking and otherwise establishes a 21-day deadline for comments if such a memo is not filed. The proposed changes would also delete certain requirements related to publication of a rulemaking notice for publication with the Texas Register and explicitly authorizes commission staff, in consideration or development of new rules or amendments to existing rules, to host workshops, publish questions for comment, or draft rules language for comment.

The proposed changes would amend §22.282, relating to Notice and Public Participation in Rulemaking Procedures replaces the requirement for the solicitation of comments through the Texas Register with a requirement to solicit comments through the commission filing system. The proposed changes would also authorize commission staff to extend comment or public hearing deadlines, request reply comments, and to provide additional comment filing instructions. The proposed changes would authorize commission staff to provide a final recommendation on a proposed rule to be filed in the rulemaking proceeding at least seven days prior to the date on which the commission is scheduled to consider the matter unless another date is specified. Additionally, the revisions would specify that the failure of staff to provide such a final recommendation within seven days prior to the date on which the commission is scheduled to consider the matter does not preclude the commission from considering the recommendation or taking action in the rulemaking project. The proposed changes remove the requirement for commission staff to notify all commenters on a proposed rule of the filing of staff's final recommendation. The proposed changes also authorize commission staff to withdraw a rule on its own motion if necessary to facilitate the expeditious republication of proposed amendments to that rule.

The proposed changes would make minor and conforming changes to the aforementioned rules and to §22.225, relating to Written Testimony and Accompanying Exhibits; §22.244, relating to Review of Municipal Rate Actions; §22.263, relating to Final Orders; and §22.264, relating to Rehearing.

Growth Impact Statement

The agency provides the following governmental growth impact statement for the proposed rule, as required by Texas Government Code §2001.0221. The agency has determined that for each year of the first five years that the proposed rule is in effect, the following statements will apply:

(1) the proposed rules will not create a government program and will not eliminate a government program;

(2) implementation of the proposed rules will not require the creation of new employee positions and will not require the elimination of existing employee positions;

(3) implementation of the proposed rules will not require an increase and will not require a decrease in future legislative appropriations to the agency;

(4) the proposed rules will not require an increase and will not require a decrease in fees paid to the agency;

(5) the proposed rules will not create a new regulation;

(6) the proposed rules will expand, limit, or repeal an existing regulation;

(7) the proposed rules will not change the number of individuals subject to the rule's applicability; and

(8) the proposed rules will not affect this state's economy.

Fiscal Impact on Small and Micro-Businesses and Rural Communities

There is no adverse economic effect anticipated for small businesses, micro-businesses, or rural communities as a result of implementing the proposed rule. Accordingly, no economic impact statement or regulatory flexibility analysis is required under Texas Government Code §2006.002(c).

Takings Impact Analysis

The commission has determined that the proposed rule will not be a taking of private property as defined in chapter 2007 of the Texas Government Code.

Fiscal Impact on State and Local Government

Davida Dwyer, Deputy Director, Office of Policy and Docket Management, has determined that for the first five-year period the proposed rule is in effect, there will be no fiscal implications for the state or for units of local government under Texas Government Code §2001.024(a)(4) as a result of enforcing or administering the sections.

Public Benefits

Ms. Dwyer has determined that for each year of the first five years the proposed section is in effect the public benefit anticipated as a result of enforcing the section will be more efficient and clear rules of practice and procedure for matters before the commission. There will be probable economic costs to persons required to comply with the rule under Texas Government Code §2001.024(a)(5).

Local Employment Impact Statement

For each year of the first five years the proposed section is in effect, there should be no effect on a local economy; therefore, no local employment impact statement is required under Texas Government Code §2001.022.

Costs to Regulated Persons

Texas Government Code §2001.0045(b) does not apply to this rulemaking because the commission is expressly excluded under subsection §2001.0045(c)(7).

Public Hearing

The commission will conduct a public hearing on this rulemaking if requested in accordance with Texas Government Code §2001.029. The request for a public hearing must be received by November 14, 2025. If a request for public hearing is received, commission staff will file in this project a notice of hearing.

Public Comments

Interested persons may file comments electronically through the interchange on the commission's website. Comments must be filed by November 17, 2025. Comments must be organized by rule section in sequential order, and each comment must clearly designate which section is being commented on. The commission invites specific comments regarding the effects of the proposed rule, including the costs associated with, and benefits that will be gained by the proposed amendments. The commission also requests any data, research, or analysis from any person required to comply with the proposed rule or any other interested person. The commission will consider the information submitted by commenters and the costs and benefits of implementation in deciding whether to modify the proposed rules on adoption. All comments should refer to Project Number 58402.

Each set of comments should include a standalone executive summary as the last page of the filing. This executive summary must be clearly labeled with the submitting entity's name and should include a bulleted list covering each substantive recommendation made in the comments.

SUBCHAPTER K. HEARINGS

16 TAC §§22.201, 22.204, 22.205, 22.207

Statutory Authority

The proposed amendments are proposed for publication under PURA § 14.001, which provides the commission with the general power to regulate and supervise the business of each public utility within its jurisdiction and to do anything specifically designated or implied by this title that is necessary and convenient to the exercise of that power and jurisdiction; PURA §14.002 and PURA §14.052 and Texas Water Code § 13.041(b), which provide the commission with the authority to adopt and enforce rules reasonably required in the exercise of its powers and jurisdiction, including rules governing practice and procedure before the commission and, as applicable, practice and procedure before the State Office of Administrative Hearings.

Amended §§22.201, 22.204, 22.205 and 22.207 are proposed under Texas Government Code Chapter 2001, Subchapter C §§2001.051-2001.062 which establish minimum standards of uniform practice and procedure for contested cases held at agencies of the State of Texas.

Amended §22.207 is also proposed under PURA §15.023 which provides the commission with the authority to assess and impose an administrative penalty against a regulated person that violates PURA, or a rule or order adopted by the commission in accordance with PURA.

Cross Reference to Statute: Public Utility Regulatory Act §§14.001, 14.002, 14.052 and Texas Water Code § 13.041(b); PURA §12.201, §15.051, §17.157; PURA Chapter 15, Subchapter B §15.021-15.033 and Texas Water Code Chapter 13, Subchapter K §§13.411-13.419; PURA Chapter 33, Subchapter C §§33.051-33.055; Texas Government Code Chapter 2001, §§2001.004-007 and Subchapter B §§2001.021-2001.041, Subchapter C §§2001.051-2001.062, Subchapter D § 2001.081-103, Subchapter F §§2001.141-2001.147; and HB 1600 (83R) and SB 567 (83R) and Texas Water Code Chapter 13.

§22.201. Place and Nature of Hearings.

(a) Commission-held hearings. All commission-held hearings will be held in person and in Austin, unless the commission determines that it is in the public interest to hold a hearing elsewhere or virtually. The presiding officer may, by written order, authorize a prehearing conference to be conducted virtually. [All evidentiary hearings shall be held in Austin, unless the commission determines that it is in the public interest to hold a hearing elsewhere. The commission may, when it is in the public interest, hold regional hearings to obtain public comment.]

(b) Hearings held at SOAH. A hearing held at SOAH will be conducted in accordance with commission rules.

§22.204. Transcript and Record.

(a) Preparation of Transcript. When requested by any party to a proceeding, a stenographic record of all proceedings before a presiding officer in any prehearing conference or hearing, including all evidence and argument, must [~~shall~~] be made by an official reporter appointed by the commission. It is the responsibility of the party desiring the stenographic record to arrange for the official reporter to be present.

(b) Purchase of Copies. A party may purchase a copy of the transcript from the official reporter [~~at rates set by the commission~~].

(c) Corrections to Transcript. Proposed written corrections of purported errors in a transcript must [~~shall~~] be filed and served on each party of record, the official reporter, and the presiding officer within a reasonable time after the discovery of the error. The presiding officer may establish time limits for proposing corrections. If no party objects to the proposed corrections within 12 days after filing, the presiding officer may direct that the official reporter correct the transcript as appropriate. In the event that the presiding officer or a party disagrees on suggested corrections, the presiding officer may hold a post-hearing [~~posthearing~~] conference and take evidence and argument to determine whether, and in what manner, the record must [~~shall~~] be changed. Following an objection to a change to the record, any change to the record may only be made as ordered by the presiding officer.

(d) Filing of Transcript and Exhibits. The court reporter must [~~shall~~] serve the transcript and exhibits in a proceeding on the presiding officer at the time the transcript is provided to the requesting party. The presiding officer will [~~shall~~] maintain the transcript and exhibits until they are filed with Central Records [~~the commission filing clerk~~]. If no court reporter is requested by a party, the presiding officer will [~~shall~~] maintain the official record and exhibits until they are filed with Central Records [~~the commission filing clerk~~]. The original record and exhibits must [~~shall~~] be filed with Central Records [~~the commission filing clerk~~] promptly after issuance of a proposal for decision.

(e) Contents of Record. The record in a contested case comprises those items specified in the APA.

§22.205. Briefs.

(a) Briefs must conform, where practicable, to the requirements established for formatting pleadings in this chapter, including requirements for citations in §22.72 of this title (relating to Form Requirements for Documents Filed with the commission). [Briefs shall conform, where practicable, to the requirements set forth for formatting pleadings in this chapter. Briefs in excess of ten pages shall contain a table of contents with page numbers stated. The presiding officer may require parties to address certain issues, or address issues in a specific order or format. If the legal authority cited in the briefs is not contained in the commission library, a copy of the legal authority shall be provided at the time the brief is filed.]

(1) Unless the presiding officer or commission counsel provides otherwise, briefs must not exceed 35 pages including citations without attachments.

(A) Briefs may include up to an additional 40 pages of attachments, but may not exceed a total of 75 pages with citations and attachments.

(B) Briefs in excess of ten pages must contain a table of contents with page numbers stated.

(2) The presiding officer may require parties to address certain issues or address issues in a specific order or format.

(b) If a legal authority cited in the briefs is not readily accessible, a copy of the legal authority must be provided upon request. Such legal authorities may include slip opinions, unpublished opinions, memorandum opinions, or documents from other jurisdictions that are not readily accessible to the commission.

§22.207. Referral to State Office of Administrative Hearings.

(a) The utility division of SOAH will conduct prehearing conferences and hearings related to contested cases before the commission, other than a prehearing conference conducted by a commission administrative law judge or a hearing conducted by one or more commissioners. [The utility division of the State of Office of Administrative Hearings shall conduct hearings related to contested cases before the commission, other than a hearing conducted by one or more commissioners. At the time SOAH receives jurisdiction of a proceeding, the commission shall provide to the administrative law judge a list of issues or areas that must be addressed. In addition, the commission may identify and provide to the administrative law judge at any time additional issues or areas that must be addressed. The commission shall send a request for setting or hearing, or request for assignment of administrative law judge to SOAH in sufficient time to allow resolution of the proceeding prior to the expiration of any jurisdictional deadline. In order to give the commission sufficient time to consider a proposal for decision, the commission may specify the length of time prior to the expiration of a jurisdictional deadline by which the administrative law judge shall issue a proposal for decision.]

(1) The commission will provide to the SOAH administrative law judge a list of issues or areas that must be addressed.

(2) At any time, the commission may identify and provide to the SOAH administrative law judge additional issues or areas that must be addressed. The commission will send a request for setting or hearing, or request for assignment of SOAH administrative law judge to SOAH in sufficient time to allow resolution of the proceeding prior to the expiration of any jurisdictional deadline.

(b) To give the commission sufficient time to consider a proposal for decision, the commission may specify the length of time prior to the expiration of a jurisdictional deadline by which the SOAH administrative law judge will issue a proposal for decision.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on September 19, 2025.

TRD-202503324

Andrea Gonzalez

Rules Coordinator

Public Utility Commission of Texas

Earliest possible date of adoption: November 2, 2025

For further information, please call: (512) 936-7244

SUBCHAPTER L. EVIDENCE AND EXHIBITS IN CONTESTED CASES

16 TAC §§22.221, 22.225, 22.228

Statutory Authority

Amended §§22.221, 22.225 and 22.228 are proposed under Texas Government Code, Subchapter D § 2001.081-103 which govern the usage of and procedures for evidence, witnesses and discovery for contested cases held at agencies of the State of Texas.

§22.221. Rules of Evidence in Contested Cases.

(a) Texas rules of evidence apply. [~~Rules of civil evidence apply.~~] The Texas Rules of [~~Civil~~] Evidence as applied in nonjury civil cases in the courts of Texas must [~~shall~~] be followed in contested cases. Irrelevant, immaterial, or unduly repetitious evidence must [~~shall~~] be excluded. When necessary to ascertain facts not reasonably susceptible of proof under the Texas Rules of [~~Civil~~] Evidence, evidence not admissible under those rules may be admitted, except where precluded by statute, if it is of a type commonly relied upon by reasonably prudent persons in the conduct of their affairs.

(b) Rules of privilege and exemption. The rules of privilege and exemption recognized by Texas law [~~shall~~] apply.

(c) Objections. Objections to evidentiary offers may be made, must [~~shall~~] be ruled upon, and must [~~shall~~] be noted in the record. Failure to object to evidence at the time it is offered constitutes a waiver of all objections to the evidence.

(d) Formal exceptions not required. Formal exceptions to rulings made by the presiding officer during a hearing are not required. It is [~~shall be~~] sufficient that the party notified the presiding officer of the grounds for the objection and desired ruling.

(e) Public comment. Public comment is not part of the evidentiary record of a contested case.

§22.225. Written Testimony and Accompanying Exhibits.

(a) Prefiling of testimony, exhibits, and objections.

(1) Unless otherwise ordered by the presiding officer upon a showing of good cause, the written direct and rebuttal testimony and accompanying exhibits of each witness must [~~shall~~] be prefiled. Deposition testimony and responses to requests for information by an opposing party that an intervenor or commission staff [~~a party~~] plans to introduce as part of its direct case must [~~shall~~] be filed at the time the intervenor or commission staff [~~party~~] files its written direct testimony. [~~The presiding officer shall establish a date for filing of deposition testimony and requests for information that an applicant plans to introduce as part of its direct case.~~]

[(2) Deposition testimony and responses to requests for information that a party plans to introduce in support of its rebuttal case shall be filed at the time the party files its written rebuttal testimony.]

(2) [~~(3)~~] A party is not required to prefile documents it intends to use during cross-examination except that the presiding officer may require parties to identify documents that may be used during cross examination if it is necessary for the orderly conduct of the hearing.

(3) [~~(4)~~] Objections to prefiled direct or rebuttal testimony and exhibits, including deposition testimony and responses to requests for information, must [~~shall~~] be filed on dates established by the presiding officer and will [~~shall~~] be ruled upon before or at the time the prefiled testimony and accompanying exhibits are offered. [~~Objections to prefiled rebuttal testimony shall be filed according to the schedule ordered by the presiding officer.~~]

(4) [~~(5)~~] Nothing in this section precludes [~~shall preclude~~] a party from using discovery responses in its direct or rebuttal case even if such responses were not received prior to the applicable deadline for prefiling written testimony and exhibits.

(5) [~~(6)~~] The prefiled testimony schedule in a major rate proceeding must [~~shall~~] be established as set out in this subsection.

(A) Any utility filing an application to change its rates in a major rate proceeding must [~~shall~~] file the written testimony and exhibits supporting its direct case on the same date that such statement of intent to change its rates is filed with the commission. As set forth in §22.243(b) of this title (relating to Rate Change Proceedings), the prefiled written testimony and exhibits must [~~shall~~] be included in the rate filing package filed with the application.

(B) Other parties in the proceeding must [~~shall~~] prefile written testimony and exhibits according to the schedule set forth by the presiding officer. Except for good cause shown or upon agreement of the parties, [~~the~~] commission staff representing the public interest may not be required to file earlier than seven days prior to hearing.

(6) Utilities filing an application for a certificate of convenience and necessity (CCN), or an amendment to a CCN, for a new electric transmission facility must file written testimony and exhibits supporting its direct case on the same date that the application is filed with the commission. [~~The prefiled testimony schedule in a major rate proceeding shall be established as set out in this subsection.~~]

[(A) Any utility filing an application to change its rates in a major rate proceeding shall file the written testimony and exhibits supporting its direct case on the same date that such statement of intent to change its rates is filed with the commission. As set forth in §22.243(b) of this title (relating to Rate Change Proceedings), the prefiled written testimony and exhibits shall be included in the rate filing package filed with the application.]

[(B) Other parties in the proceeding shall prefile written testimony and exhibits according to the schedule set forth by the presiding officer. Except for good cause shown or upon agreement of the parties, the commission staff representing the public interest may not be required to file earlier than seven days prior to hearing.]

~~[(C) The presiding officer shall establish dates for filing of rebuttal testimony.]~~

(7) For any contested case that is not a major rate proceeding nor a CCN or CCN amendment proceeding for an electric transmission facility, the applicant is not required to prefile written testimony and exhibits at the time the filing is made unless otherwise required by statute or rule. [For electric and telecommunication rate proceedings, the presiding officer shall establish a prefiled testimony schedule for PURA chapter 36, subchapter D or chapter 53, subchapter D rate cases and for cases other than major rate proceedings. In proceedings that are not major rate proceedings, notice of intent proceedings, applications for certificates of convenience and necessity for new generating plant, or applications for fuel reconciliations, the applicant is not required to prefile written testimony and exhibits at the time the filing is made unless otherwise required by statute or rule.]

(8) The times for prefiling set out in this section may be modified by the presiding officer upon a showing of good cause. [For all water and sewer matters filed under TWC chapters 12 or 13, the presiding officer shall establish a prefiled testimony schedule. The applicant is not required to prefile written testimony and exhibits at the time the filing is made unless otherwise required by statute or rule.]

(9) Late-filed testimony may be admitted into evidence if the testimony is necessary for a full disclosure of the facts and admission of the testimony into evidence would not be unduly prejudicial to the legal rights of any party. A party that intends to offer late-filed testimony into evidence must, at the earliest opportunity, inform the presiding officer, who will establish reasonable procedures and deadlines regarding such testimony. [Utilities filing an application for construction of a transmission facility that has been designated by the Electric Reliability Council of Texas (ERCOT) independent system operator as critical to the reliability of the ERCOT system and to be considered on an expedited basis, shall file written testimony and exhibits supporting its direct case on the same date that the application is filed with the commission. This requirement shall also apply to transmission lines located in other reliability councils or administered by other independent system operators provided such councils have a process for designation of critical transmission lines.]

~~[(10) The times for prefiling set out in this section may be modified upon a showing of good cause.]~~

[(11) Late-filed testimony may be admitted into evidence if the testimony is necessary for a full disclosure of the facts and admission of the testimony into evidence would not be unduly prejudicial to the legal rights of any party. A party that intends to offer late-filed testimony into evidence shall, at the earliest opportunity, inform the presiding officer, who shall establish reasonable procedures and deadlines regarding such testimony.]

(b) Admission of prefiled testimony. Unless otherwise ordered by the presiding officer, direct and rebuttal testimony must [~~shall~~] be received in written form. The written testimony of a witness on direct examination or rebuttal, either in narrative or question and answer form, may be received as an exhibit and incorporated into the record without the written testimony being read into the record. A witness who is offering written testimony must [~~shall~~] be sworn and must [~~shall~~] be asked whether the written testimony is a true and accurate representation of what the testimony would be if the testimony were to be given orally at the time the written testimony is offered into evidence. The witness must [~~shall~~] submit to cross-examination, clarifying questions, redirect examination, and recross-examination, unless the right to cross-examine the witness is waived by all parties and accepted by the presiding officer. The presiding officer may allow substitution of a witness or voir dire examination where appropriate. Written testimony is [~~shall be~~] subject to the same evidentiary objections as oral testimony. Timely prefiling of written testimony and exhibits, if required under this section or by order of the presiding officer, is a prerequisite for admission into evidence.

(c) Supplementation of prefiled testimony and exhibits. Oral or written supplementation of prefiled testimony and exhibits may be allowed prior to or during the hearing provided that the witness is available for cross-examination. The presiding officer may exclude such testimony if there is a showing that the supplemental testimony raises new issues or unreasonably deprives opposing parties of the opportunity to respond to the supplemental testimony. The presiding officer may admit the supplemental testimony and grant the parties time to respond.

(d) Tender and service. On or before the date the prefiled written testimony and exhibits are due, parties must file such testimony and exhibits in accordance with the requirements of [~~shall file the number of copies required by~~] §22.71 of this title (relating to Commission Filing Requirements and Procedures [~~Filing of Pleadings, Documents and Other Materials~~]), or other commission rule or order, of the testimony and exhibits with Central Records and must [~~the commission filing clerk and shall~~] serve a copy upon each party.

(e) Withdrawal of evidence. Any exhibit offered and admitted in evidence may not be withdrawn except with the agreement of all parties and approval of the presiding officer.

§22.228. Stipulation of Facts.

No stipulation of facts between the parties or their authorized representatives will [~~shall~~] be admitted into evidence unless it has been reduced to writing and signed by the parties or their authorized representatives or, upon leave of the presiding officer, dictated into the record during a prehearing conference or hearing at which all parties to the agreement are present, have waived the right to be present, or have received reasonable notice that the stipulation [~~settlement~~] will be read into the record at that prehearing conference or hearing.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on September 19, 2025.

TRD-202503325

Andrea Gonzalez

Rules Coordinator

Public Utility Commission of Texas

Earliest possible date of adoption: November 2, 2025

For further information, please call: (512) 936-7244

SUBCHAPTER M. PROCEDURES AND FILING REQUIREMENTS IN PARTICULAR COMMISSION PROCEEDINGS

16 TAC §§22.241, 22.244, 22.246

Statutory Authority

Amended §22.241 is proposed under PURA §12.201 which requires the commission to prepare and publicize information of public interest describing the functions of the commission and the commission's procedures by which a complaint is filed with and resolved by the commission. PURA §12.201 also requires the commission to, by rule, establish methods by which consumers and service recipients are notified of the name, mailing address, and telephone number of the commission for the purpose of directing complaints to the commission. Amended §22.241 is also proposed under PURA § 15.051 which authorizes an affected person to complain to the regulatory in writing by a public utility in violation or claimed violation of a law that the regulatory authority has jurisdiction to administer or of an order, ordinance, or rule of the regulatory authority, and requires the commission to, for a reasonable period preserve information about each complaint filed with the commission that the commission has authority to resolve. Amended §22.241 is also proposed under PURA § 17.157 which authorizes the commission to resolve disputes between a retail customer and a billing utility, service provider, telecommunications utility, retail electric provider, or electric utility, including the investigation of alleged violations.

Amended §22.244 is proposed under PURA Chapter 33, Subchapter C §§33.051-33.055 which governs the appeal of municipal ratemaking orders to the commission.

Amended §22.246 is proposed under PURA Chapter 15, Subchapter B §15.021-15.033 and Texas Water Code Chapter 13, Subchapter K §§13.411-13.419 which collectively establish the commission's enforcement authority to enjoin, investigate, or require compliance from a person or entity in violation or alleged violation of statute or commission rules, including the commission's authority to impose and assess administrative penalties.

§22.241. Investigations.

(a) Commission investigations.

(1) The commission may at any time institute formal investigations on its own motion, or the motion of commission staff, into any matter within the commission's jurisdiction [~~the commission's staff~~]. Orders and pleadings initiating investigations will [~~shall~~] specify the matters to be investigated, and will [~~shall~~] be served upon the person being investigated.

(2) Notice of commission-instituted investigations of specific persons subject to commission regulation and investigative proceedings affecting such persons as a class will be served upon all affected persons under investigation. The commission will [~~shall~~] post notice with the Texas Register of prehearing conferences and hearings. The presiding officer may require additional notice.

(b) Show cause orders in complaint proceeding. The presiding officer, either upon his or her own motion or upon receipt of written complaint, may at any time after appropriate notice has been given, summon any person within the commission's jurisdiction to appear in a public hearing and show cause why such person should not be compelled to comply with any applicable statute, rule, regulation, or general order with which the person is allegedly not in compliance. All hearings in such show cause proceedings will [~~shall~~] be conducted in accordance with the provisions of this chapter.

(c) No limitations. Nothing in this section limits [~~shall be construed to limit~~] the commission's authority to investigate persons subject to the commission's jurisdiction.

§22.244. Review of Municipal Electric Rate Actions.

(a) Contents of petitions. In addition to any information required by statute, petitions for review of municipal rate actions filed under PURA §33.052 or §§33.101 - 33.104 must [~~shall~~] contain the original petition for review with the required signatures and following additional information.

(1) Each signature page of a petition must [~~shall~~] contain in legible form above the signatures the following:

(A) A statement that the petition is an appeal of a specific rate action of the municipality in question;

(B) The date of and a concise description of that rate action;

(C) A statement designating a specific individual, group of individuals, or organization as the signatories' authorized representative; and

(D) A statement that the designated representative is authorized to represent the signatories in all proceedings before the commission and appropriate courts of law and to do all things necessary to represent the signatories in those proceedings.

(2) The printed or typed name, telephone number, street or rural route address, and facsimile transmission number, if available, of each signatory must [~~shall~~] be provided. Post office box numbers are not sufficient. In appeals relating to PURA §§33.101 - 33.104, the petition must [~~shall~~] list the address of the location where service is received if the address differs from the residential address of the signatory.

(b) Signatures. A signature must [~~shall~~] be counted only once, regardless of the number of bills the signatory receives. The signature must [~~shall~~] be of the person in whose name service is provided or such person's spouse. The signature must [~~shall~~] be accompanied by a statement indicating whether the signatory is appealing the municipal rate action as a qualified voter of that municipality under PURA §33.052, or as a customer of the municipality served outside the municipal limits under PURA §§33.101 - 33.104.

(c) Validity of petition and correction of deficiencies. The petition must [~~shall~~] include all of the information required by this section, legibly written, for each signature in order for the signature to be deemed valid. The presiding officer may allow the petitioner a reasonable time of up to 30 days from the date any deficiencies are identified to cure any defects in the petition.

(d) Verification of petition. Unless otherwise provided by order of the presiding officer, the following procedures must [~~shall~~] be followed to verify petitions appealing municipal rate actions filed under PURA §33.052 and §§33.101 - 33.104.

(1) Within 15 days of the filing of an appeal of a municipal rate action, the Office of Policy and Docket Management must [~~Commission Advising and Docket Management Division shall~~] send a copy of the petition to the respondent municipality with a directive that the municipality verify the signatures on the petition.

(2) Within 30 days after receipt of the petition from the Office of Policy and Docket Management [~~Commission Advising and Docket Management Division~~], the municipality must [~~shall~~] file with the commission a statement of review, together with a supporting written affidavit sworn to by a municipal official.

(3) The period for the municipality's review of the signatures on the petition may be extended by the presiding officer for good cause.

(4) Failure of the municipality to timely submit the statement of review must [~~shall~~] result in all signatures being deemed valid, unless any signature is otherwise shown to be invalid or is invalid on its face.

(5) Objections by the municipality to the authenticity of signatures must [~~shall~~] be set out in its statement of review and will [~~shall~~] be resolved by the presiding officer.

(e) Disputes. Any dispute over the sufficiency or legibility of a petition will [~~shall~~] be resolved by the presiding officer by interim order.

§22.246. Administrative Penalties.

(a) Scope. This section addresses enforcement actions related to administrative penalties or disgorgement of excess revenues only and does not apply to any other enforcement actions that may be undertaken by the commission or [~~the~~] commission staff.

(b) - (e) (No change.)

(f) Report of violation or continuing violation. If, based on the investigation undertaken in accordance with subsection (e) of this section, the executive director determines that a violation or a continuing violation has occurred, the executive director may issue a report to the commission.

(1) Contents of the report. The report must state the facts on which the determination is based and a recommendation on the imposition of an administrative penalty, including a recommendation on the amount of the administrative penalty and, if applicable under §25.503 of this title, a recommendation that excess revenue be disgorged.

(2) Notice of report.

(A) Within 14 days after the report is issued, the executive director will give written notice of the report to the person who is alleged to have committed the violation or continuing violation which is the subject of the report. The notice must [~~may~~] be given by regular, [or] certified mail, or email to the mailing address or email address maintained in the commission's records. If no such addresses exist, the executive director or executive director's designee will make reasonable efforts to notify the person who is alleged to have committed the violation.

(B) - (D) (No change.)

(g) (No change.)

(h) Settlement conference. A settlement conference may be requested by any party to discuss the occurrence of the violation or continuing violation, the amount of the administrative penalty, disgorged excess revenue if applicable, and the possibility of reaching a settlement prior to hearing. A settlement conference is not subject to the Texas Rules of Evidence or the Texas Rules of Civil Procedure; however, the discussions are subject to Texas Rules of Civil Evidence 408, concerning compromise and offers to compromise.

(1) (No change.)

(2) If a settlement is reached after the matter has been referred to SOAH [~~the State Office of Administrative Hearings~~], the matter will be returned to the commission. If the settlement is approved, the commission will issue an order memorializing commission approval and setting forth commission orders associated with the settlement agreement.

(i) - (j) (No change.)

(k) Distribution of Disgorged Excess Revenues. Disgorged excess revenues must be remitted to an independent organization, as defined in PURA §39.151. The independent organization must distribute the excess revenue to affected wholesale electric market participants in proportion to their load during the intervals when the violation occurred to be used to reduce costs or fees incurred by retail electric customers. [The load of any market participants that are no longer active at the time of the distribution will be removed prior to calculating the load proportions of the affected wholesale electric market participants that are still active.] However, if the commission determines other wholesale electric market participants are affected or a different distribution method is appropriate, the commission may direct require the independent organization to distribute the excess revenue to affected wholesale market participants using a different distribution method in the same or [~~commission staff to open~~] a subsequent proceeding [~~to address those issues~~].

(1) - (3) (No change.)

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on September 19, 2025.

TRD-202503326

Andrea Gonzalez

Rules Coordinator

Public Utility Commission of Texas

Earliest possible date of adoption: November 2, 2025

For further information, please call: (512) 936-7244

SUBCHAPTER N. DECISION AND ORDERS

16 TAC §§22.261 - 22.264

Statutory Authority

The proposed amendments and repeal are proposed for publication under PURA § 14.001, which provides the commission with the general power to regulate and supervise the business of each public utility within its jurisdiction and to do anything specifically designated or implied by this title that is necessary and convenient to the exercise of that power and jurisdiction; PURA §14.002 and PURA §14.052 and Texas Water Code § 13.041(b), which provide the commission with the authority to adopt and enforce rules reasonably required in the exercise of its powers and jurisdiction, including rules governing practice and procedure before the commission and, as applicable, practice and procedure before the State Office of Administrative Hearings.

Amended §§22.261 - 22.264 are proposed under Texas Government Code Chapter 2001, Subchapter F §§2001.141-2001.147 which establish the requirements and procedures, including notice obligations, associated with the issuance of final decisions and orders by a state agency in a contested case, including the procedures for prerequisites to appeal and requirements for motions for rehearing.

§22.261. Proposals for Decision.

(a) Requirement and Contents of Proposal for Decision. In a contested case, if a majority of the commissioners has not heard the case or read the record, the commission may not issue a final order, if adverse to a party other than the Commission, until a proposal for decision is served on all parties. The proposal for decision will [~~shall~~] be prepared by the presiding officer [~~officer(s)~~] who conducted the hearing or who have read the record. The proposal for decision will [~~shall~~] include a proposed final order, a statement of the reasons for the proposed decision, and proposed findings of fact and conclusions of law in support of the proposed final order. Any party may file exceptions to the proposed decision in accordance with subsection (d) of this section. The presiding officer may supplement or amend a proposal for decision in response to the exceptions or replies submitted by the parties or upon the presiding officer's own motion. Making corrections or minor revisions of a proposal for decision is not considered issuance of an amended or supplemental proposal for decision.

(b) Procedures Regarding Proposed Orders. If the presiding officer's recommendation is not adverse to any party, the recommendation may be made through a proposed order containing findings of fact and conclusions of law. The proposed order must [~~shall~~] be served on all parties, and the commission counsel or presiding officer will [~~shall~~] establish a deadline for submitting proposed corrections or clarifications.

(c) Findings and Conclusions. The commission counsel or presiding officer may direct or authorize the parties to draft and submit proposed findings of fact and conclusions of law. The commission is not required to rule on findings of fact and conclusions of law that are not required or authorized.

(d) Exceptions and Replies.

(1) Who may file. Any party may file exceptions to the Proposal for Decision within the time period specified by commission counsel or the presiding officer [~~the presiding officer~~]. If any party files exceptions, the opportunity will [~~shall~~] be afforded to all parties to respond within a time period set by the commission counsel or presiding officer. Replies may only be filed in response to filed exceptions.

(2) Presentation. The presiding officer or commission counsel may require that issues be addressed in a specified order or according to a specified format. Proposed findings and conclusions may be submitted in conjunction with exceptions and replies. The evidence and law relied upon will [~~shall~~] be stated with particularity, and any evidence or arguments relied upon will [~~shall~~] be grouped under the exceptions or replies to which they relate.

(3) Request for Extension. A request for extension of time within which to file exceptions or replies must [~~shall~~] be filed with Central Records [~~the commission filing clerk~~] and served on all parties. The presiding officer or commission counsel may allow additional time for good cause shown. If additional time is allowed for exceptions, reasonable additional time will [~~shall~~] be allowed for replies.

§22.262. Commission Action After a Proposal for Decision.

(a) - (c) (No change.)

(d) Oral Argument Before the Commission.

(1) Any party may request oral argument before the commission before the final disposition of any proceeding.

(2) Oral argument may be allowed at the commission's discretion. The commission may limit the scope and duration of oral argument. The party bearing the burden of proof has the right to open and close oral argument.

(3) A request for oral argument must be filed as a separate written pleading. The request must be filed no later than 5:00 [~~3:00~~] p.m. seven days before the open meeting at which the commission is scheduled to consider the case.

(4) Upon the filing of a motion for oral argument, the Office of Policy and Docket Management must send a separate ballot to each commissioner to determine whether the commission will hear oral argument at an open meeting. An affirmative vote by one commissioner is required to grant oral argument. Two days before the commission is scheduled to consider the case, the Office of Policy and Docket Management will file a notice to the parties regarding whether a request for oral argument has been granted.

(5) The absence or denial of a request for oral argument does not preclude the commissioners from asking questions of any party present at the open meeting.

(e) (No change.)

§22.263. Final Orders.

(a) Form and Content.

(1) A final order of the commission will [~~shall~~] be in writing and signed by a majority of the commissioners.

(2) A final order will [~~shall~~] include findings of fact and conclusions of law separately stated and may incorporate findings of fact and conclusions of law proposed within a proposal for decision.

(3) Findings of fact, if set forth in statutory language, will [~~shall~~] be accompanied by a concise and explicit statement of the underlying facts supporting the findings.

(4) The final order will [~~shall~~] comply with the requirements of §22.262[~~(b)~~] of this title (relating to Commission Action After a Proposal for Decision).

(b) Notice. Parties will [~~shall~~] be notified of the commission's final order as required by the APA and §22.74 of this title (relating to Service of Pleadings and Documents) to the extent that provision does not conflict with the APA.

(c) Effective Date of Order. Unless otherwise stated, the date a final order is signed is the effective date of that order, and such date will [~~shall~~] be stated therein.

(d) Date That an Order is Signed. An order is signed on the date shown on the order. If a sworn motion filed under APA §2001.142(c) is granted, with or without commission action, then, regardless of the date shown on the order, the date that the commission's order is considered to be signed is [~~shall be~~] the date specified in that sworn motion as the date that the movant received the order or obtained actual knowledge of the order. If more than one sworn motion is granted, then the date that the commission's order is considered to be signed is the latest date specified in any such granted motions.

(e) Reciprocity of Final Orders Between States. After reviewing the facts and the issues presented, a final order may be adopted by the commission even though it is inconsistent with the commission's procedural or substantive rules provided that the final order, or the portion thereof that is inconsistent with commission rules, is a final order, or a part thereof, rendered by a regulatory agency of some state other than the State of Texas and provided further that the number of customers in Texas affected by the final order is no more than the lesser of either 1,000 customers or 10% of the total number of customers of the affected utility.

§22.264. Rehearing.

(a) Motions for rehearing, replies thereto, and commission action on motions for rehearing are [~~shall be~~] governed by the APA. Only a party to a proceeding before the commission may file a motion for rehearing.

(b) All motions for rehearing must [~~shall~~] state the claimed error with specificity. If an ultimate finding of fact stated in statutory language is claimed to be in error, the motion for rehearing must [~~shall~~] state all underlying or basic findings of fact claimed to be in error and must [~~shall~~] cite specific evidence which is relied upon as support for the claim of error.

(c) A motion for rehearing or a reply to a motion for rehearing is untimely if it is not filed by the deadlines specified in APA §2001.146 or, if the commission extends the time to file such motion or reply or approves a time agreed to by the parties, the date specified in the order of the commission extending time or approving the time.

(d) A motion by a party to extend time related to a motion for rehearing must be filed no less than ten days before the end of the time period that the party seeks to extend or it is untimely. Such motion must state with specificity the reasons the extension is justified.

(e) Upon the filing of a timely motion for rehearing or a timely motion to extend time, the Office of Policy and Docket Management must [~~Commission Advising and Docket Management Division shall~~] send separate ballots to each commissioner to determine whether they will consider the motion at an open meeting. Untimely motions will [~~shall~~] not be balloted. An affirmative vote by one commissioner is required for consideration of a motion for rehearing or a motion to extend time at an open meeting. If no commissioner votes to add a timely motion to extend time to an open meeting for consideration, the motion is overruled ten days after the motion is filed.

(f) If the commission extends time to act on a motion for rehearing, the Office of Policy and Docket Management [~~Commission Advising and Docket Management Division shall~~] send separate ballots to each commissioner to determine whether they will consider the motion for rehearing at a subsequent open meeting. An affirmative vote by one commissioner is required to place the motion for rehearing on an open meeting agenda.

(g) A party that files a motion for rehearing or a reply to a motion for rehearing must [~~shall~~] deliver a copy of the motion or reply to every other party in the case.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on September 19, 2025.

TRD-202503327

Andrea Gonzalez

Rules Coordinator

Public Utility Commission of Texas

Earliest possible date of adoption: November 2, 2025

For further information, please call: (512) 936-7244

SUBCHAPTER O. RULEMAKING

16 TAC §22.281, §22.282

Statutory Authority

Amended §22.281 and §22.282 are proposed under Texas Government Code §§2001.004-007 and Subchapter B §§2001.021-2001.041 which establish general rulemaking requirements and procedures, including notice obligations, for agencies of the State of Texas

§22.281. Initiation of Rulemaking.

(a) Petition for Rulemaking. Any interested person, as defined by the APA, may petition the commission requesting the adoption of a new rule or the amendment of an existing rule.

(1) The petition must [~~shall~~] be in writing and must [~~shall~~] be submitted to the project opened under paragraph (2) of this subsection. The petition must include a brief explanation of the rule, each reason [~~the reason(s)~~] the new or amended rule should be adopted, the statutory authority for such a rule or amendment, and complete proposed text for the rule. The proposed text for the rule must [~~shall~~] indicate by striking through the words, if any, to be deleted from the current rule and by underlining the words, if any, to be added to the current rule. A suggested new rule or rule amendment that does not comply with each of the requirements of this section, including any rulemaking suggestion made in a contested case proceeding, will be construed as a policy recommendation and will not be processed as a formal rulemaking petition.

(2) Each calendar year, commission staff will open a general project for petitions for rulemaking and post the control number on the commission's website. [Upon receipt of a petition for rulemaking, the commission shall submit a notice for publication in the "In Addition" section of the Texas Register. The notice shall include a summary of the petition, the name of the individual, organization or entity that submitted the petition, and notification that a copy of the petition will be available for review and copying in the commission's central records. Comments on the petition shall be due 21 days from the date of publication of the notice. Failure to publish a notice of a petition for rulemaking in the Texas Register shall not invalidate any commission action on the petition for rulemaking.]

(3) Commission staff may file a memo in the general project opened under paragraph (2) of this subsection establishing a deadline for interested persons to file comments in response to the petition for rulemaking or designating a new control number for the submission of comments. Commission staff may relocate any relevant filings from the general control number to the new project. If commission staff does not file a memo under this paragraph, comments on a petition for rulemaking may be filed in the general project and the deadline for submitting comments on the petition is 21 days after the date the petition is filed. [~~Within 60 days after submission of a petition, the commission either shall deny the petition in writing, stating its reasons for the denial, or shall initiate rulemaking proceedings.~~]

(4) Within 60 days after submission of a petition that fully complies with the requirements of paragraph (1) of this subsection, the commission will either deny the petition in writing, stating its reasons for the denial, or initiate a rulemaking proceeding.

(b) Commission Initiated Rulemaking. The commission may initiate rulemaking proceedings on its own motion. Nothing in this section precludes [~~shall preclude the commission general counsel or~~] commission staff from consideration or development of new rules or amendments to existing rules , including hosting workshops or publishing questions or draft rules language for comment, without express direction from the commission.

§22.282. Notice and Public Participation in Rulemaking Procedures.

(a) Initial Comments. Prior to the publication of [~~publishing~~] a proposed rule or initiation of [~~initiating~~] an amendment to an existing rule, the commission or commission staff may solicit comments on the need for a rule and potential scope of the rule by filing a request for comments on the commission filing system [publication of a notice of rulemaking project in the "In Addition" section of the Texas Register. A notice filed pursuant to this section shall contain a brief description and statement of the intended objective of the proposed rule and indicate if a draft of the proposed rule is available for review by interested persons]. Unless otherwise prescribed by the commission or commission staff, any comments concerning the rulemaking project must [~~shall~~] be submitted within 30 days from the date the request for comments is filed. The commission or commission staffmay hold workshops or public hearings on the rulemaking project.

(b) Notice. The commission may initiate a rulemaking project by publishing notice of the proposed rule in accordance with Tex. Gov't Code §§ 2001.021 - 2001.037.

(c) Public Comments. Prior to the adoption of any rule, the commission will [~~shall~~] afford all interested persons a reasonable opportunity to submit data, views, or arguments in writing. Written comments must be filed within 30 days of the date the proposed rule is published in the Texas Register unless the commission establishes a different date for submission of comments. The commission may also establish a schedule for reply comments if it determines that additional comments would be appropriate or helpful in reaching a decision on the proposed rule. Commission staff may provide an extension to the comment deadline, request reply comments, or provide additional comment filing instructions in a rulemaking project.

(d) Public Hearing. The commission or commission staff may schedule workshops or public hearings on the proposed rule. Commission staff will hold a public hearing [~~An opportunity for public hearing shall be granted~~] if requested by at least 25 persons, by a governmental subdivision or agency, or by an association having at least 25 members. The request for public hearing must be made no later than 30 days after the date the proposed rule is published in the Texas Register, unless the commission establishes a different date for requesting a public hearing. Commission staff may provide an extension to the public hearing request deadline.

(e) Staff Recommendation. Staff's final recommendation will, if practicable, [~~shall~~] be filed in the rulemaking proceeding [~~submitted to the commission and filed in central records~~] at least seven days prior to the date on which the commission is scheduled to consider the matter, unless some other date is specified by the commission. If commission staff does not file its final recommendation at least seven days prior to the date on which the commission is scheduled to consider the matter, the commission may still consider the recommendation or take action in the rulemaking project. [~~Staff will notify all persons who have filed comments concerning the proposed rule of the filing of staff's final recommendation.~~]

(f) Final Adoption. Following consideration of comments, the commission will issue an order adopting, adopting as amended, or withdrawing the rule within six months after the date of publication of the proposed rule or the rule is automatically withdrawn. Commission staff may withdraw a rule on its own motion if necessary to facilitate the expeditious republication of proposed amendments to that rule.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on September 19, 2025.

TRD-202503328

Andrea Gonzalez

Rules Coordinator

Public Utility Commission of Texas

Earliest possible date of adoption: November 2, 2025

For further information, please call: (512) 936-7244

SUBCHAPTER M. PROCEDURES AND FILING REQUIREMENTS IN PARTICULAR COMMISSION PROCEEDINGS

16 TAC §22.248

The Public Utility Commission of Texas (commission) proposes one repeal in the Chapter 22 procedural rules. The proposed repeal is in Subchapter M, §22.248, relating to Retail Public Utilities.

Rule Review Stakeholder Recommendations

Growth Impact Statement

(1) the proposed rules will not create a government program and will not eliminate a government program;

(2) implementation of the proposed rules will not require the creation of new employee positions and will not require the elimination of existing employee positions;

(3) implementation of the proposed rules will not require an increase and will not require a decrease in future legislative appropriations to the agency;

(4) the proposed rules will not require an increase and will not require a decrease in fees paid to the agency;

(5) the proposed rules will not create a new regulation;

(6) the proposed rules will expand, limit, or repeal an existing regulation;

(7) the proposed rules will not change the number of individuals subject to the rule's applicability; and

(8) the proposed rules will not affect this state's economy.

Fiscal Impact on Small and Micro-Businesses and Rural Communities

Takings Impact Analysis

The commission has determined that the proposed rule will not be a taking of private property as defined in chapter 2007 of the Texas Government Code.

Fiscal Impact on State and Local Government

Public Benefits

Local Employment Impact Statement

Costs to Regulated Persons

Texas Government Code §2001.0045(b) does not apply to this rulemaking because the commission is expressly excluded under subsection §2001.0045(c)(7).

Public Hearing

Public Comments

Interested persons may file comments electronically through the interchange on the commission's website. Comments must be filed by November 17, 2025. Comments must be organized by rule section in sequential order, and each comment must clearly designate which section is being commented on. The commission invites specific comments regarding the effects of the proposed rule, including the costs associated with, and benefits that will be gained by the proposed amendments and repeal. The commission also requests any data, research, or analysis from any person required to comply with the proposed rule or any other interested person. The commission will consider the information submitted by commenters and the costs and benefits of implementation in deciding whether to modify the proposed rules on adoption. All comments should refer to Project Number 58402.

Statutory Authority

The proposed repeal is proposed for publication under PURA § 14.001, which provides the commission with the general power to regulate and supervise the business of each public utility within its jurisdiction and to do anything specifically designated or implied by this title that is necessary and convenient to the exercise of that power and jurisdiction; PURA §14.002 and PURA §14.052 and Texas Water Code § 13.041(b), which provide the commission with the authority to adopt and enforce rules reasonably required in the exercise of its powers and jurisdiction, including rules governing practice and procedure before the commission and, as applicable, practice and procedure before the State Office of Administrative Hearings.

§22.248, relating to Retail Public Utilities is repealed in accordance with HB 1600 (83R), SB 567 (83R) and Texas Water Code Chapter 13 which transferred regulatory jurisdiction of the rates, operations, and services of retail public utilities from the Texas Commission on Environmental Quality to the commission.

§22.248. Retail Public Utilities.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on September 22, 2025.

TRD-202503389

Andrea Gonzalez

Rules Coordinator

Public Utility Commission of Texas

Earliest possible date of adoption: November 2, 2025

For further information, please call: (512) 936-7244

CHAPTER 25. SUBSTANTIVE RULES APPLICABLE TO ELECTRIC SERVICE PROVIDERS

SUBCHAPTER I. TRANSMISSION AND DISTRIBUTION

DIVISION 1. OPEN-ACCESS COMPARABLE TRANSMISSION SERVICE FOR ELECTRIC UTILITIES IN THE ELECTRIC RELIABILITY COUNCIL OF TEXAS

16 TAC §25.205

The Public Utility Commission of Texas (commission) proposes new 16 Texas Administrative Code (TAC) §25.205 relating to Net Metering Arrangements Involving a Large Load Customer Co-Located with an Existing Generation Resource. This proposed rule will implement Public Utility Regulatory Act (PURA) §39.169 as enacted by Senate Bill (SB) 6 during the Texas 89th Regular Legislative Session. The new rule will apply to a proposed net metering arrangement involving a large load and an existing generation resource and will establish the criteria for ERCOT's study of a proposed net metering arrangement. The rule will also set forth the procedural steps for ERCOT to complete its study of a proposed net metering arrangement within 120 days and the procedural steps for the commission to approve, with or without conditions, or deny a proposed net metering arrangement within 60 days after ERCOT files its study results and recommendations with the commission.

Growth Impact Statement

(1) the proposed rule will not create a government program and will not eliminate a government program;

(2) implementation of the proposed rule will not require the creation of new employee positions and will not require the elimination of existing employee positions;

(3) implementation of the proposed rule will not require an increase and will not require a decrease in future legislative appropriations to the agency;

(4) the proposed rule will not require an increase and will not require a decrease in fees paid to the agency;

(5) the proposed rule will create a new regulation;

(6) the proposed rule will not expand, limit, or repeal an existing regulation;

(7) the proposed rule will not change the number of individuals subject to the rule's applicability; and

(8) the proposed rule will not affect this state's economy.

Fiscal Impact on Small and Micro-Businesses and Rural Communities

Takings Impact Analysis

The commission has determined that the proposed rule will not be a taking of private property as defined in chapter 2007 of the Texas Government Code.

Fiscal Impact on State and Local Government

Jessie Horn, Sr. Counsel, Rules and Projects Division, has determined that for the first five-year period the proposed rule is in effect, there will be no fiscal implications for the state or for units of local government under Texas Government Code §2001.024(a)(4) as a result of enforcing or administering the sections.

Public Benefits

Ms. Horn has determined that for each year of the first five years the proposed section is in effect the public benefit anticipated as a result of enforcing the section will be increased transparency about the process for reviewing a proposed net metering arrangement and increased reliability to the ERCOT power grid. There will be no probable economic cost to persons required to comply with the rule under Texas Government Code §2001.024(a)(5).

Local Employment Impact Statement

Costs to Regulated Persons

Texas Government Code §2001.0045(b) does not apply to this rulemaking because the commission is expressly excluded under subsection §2001.0045(c)(7).

Public Hearing

Commission staff will conduct a public hearing on this rulemaking if requested in accordance with Texas Government Code §2001.029. The request for a public hearing must be received by October 17, 2025. If a request for public hearing is received, commission staff will file in this project a notice of hearing.

Public Comments

Interested persons may file comments electronically through the interchange on the commission's website or by submitting a paper copy to Central Records, Public Utility Commission of Texas, 1701 North Congress Avenue, P.O. Box 13326, Austin, Texas 78711-3326. Initial comments must be filed by October 17, 2025. Reply comments must be filed by October 31, 2025. Comments should be organized in a manner consistent with the organization of the proposed rule. The commission invites specific comments regarding the costs associated with, and benefits that will be gained by, implementation of the proposed rule. The commission will consider the costs and benefits in deciding whether to modify the proposed rule on adoption. All comments should refer to Project Number 58479.

In addition to general comments on the text of the proposed rule, the commission invites interested persons to address the following specific questions:

Does the commission have authority to approve a net metering arrangement if retail electric service to the large load customer would not be provided by the municipally owned utility or electric cooperative that is certificated to provide retail electric service to the area in which the large load customer is located?

PURA §39.169(c) authorizes the electric cooperative, transmission and distribution utility, or municipally owned utility that provides electric service at the location of the new net metering arrangement to object to the arrangement for reasonable cause, including a violation of other law.

How should the commission interpret "electric service" in PURA §39.169(c)?

What process should be used for addressing an objection to a net metering arrangement based on a violation of other law?

PURA §39.169(g) limits the parties to a proceeding under PURA §39.169 to the commission, ERCOT, the interconnecting electric cooperative, transmission and distribution utility, or municipally owned utility, and a party in the net metering arrangement. How should the commission interpret "interconnecting" in PURA §39.169(g)?

Is there a scenario where the electric cooperative, transmission and distribution utility, or municipally owned utility that objects to a net metering arrangement under PURA §39.169(c) is not a party to the proceeding under PURA §39.169(g)? If so, how can these two statutory provisions be reconciled?

PURA §39.169(d) states that if the commission imposes conditions on a proposed net metering arrangement, the conditions must require a generation resource that makes dispatchable capacity available to the ERCOT region before the implementation of a net metering arrangement under this section to make at least that amount of dispatchable capacity available to the ERCOT power region after the implementation of the arrangement at the direction of the independent organization in advance of an anticipated emergency condition.

How should the commission interpret "dispatchable capacity"?

How should the commission interpret "make available"?

How far in advance of an anticipated emergency condition should ERCOT be able to direct a generation resource to make dispatchable capacity available to the ERCOT region? Should "advance" be measured based on time, megawatt, or some other metric?

How should the commission interpret an "anticipated emergency condition"?

Statutory Authority

Cross Reference to Statute: Public Utility Regulatory Act §14.001; §14.002; §39.151; and §39.169.

§25.205. Net Metering Arrangements Involving a Large Load Customer Co-Located with an Existing Generation Resource.

(a) Applicability. This section applies to a net metering arrangement involving a large load customer and an existing generation resource. This section does not apply to a generation resource or energy storage resource:

(1) the registration for which included a co-located large load customer at the time of the generation resource or energy storage resource's energization, regardless of whether the large load customer was energized at a later date; or

(2) a majority interest of which is owned indirectly or directly as of January 1, 2025, by a parent company of a customer that participates in the new net metering arrangement.

(b) Definitions. The following words and terms, when used in this section, have the following meanings unless the context indicates otherwise:

(1) Applicants--the parties to a net metering arrangement for which approval is sought under this section.

(2) Energy storage resource--an energy storage system registered with ERCOT as an energy storage resource for the purpose of providing energy or ancillary services to the ERCOT grid and associated facilities that are behind the system's point of interconnection, necessary for the operation of the system, and not part of a manufacturing process that is separate from the generation of electricity.

(3) Existing generation resource--a generation resource registered with ERCOT as a stand-alone generation resource as of September 1, 2025 or an energy storage resource registered with ERCOT as a stand-alone energy storage resource as of September 1, 2025.

(4) Generation resource--a generator registered with ERCOT as a generation resource and capable of providing energy or ancillary services to the ERCOT grid, as well as associated facilities that are behind the generator's point of interconnection, necessary for the operation of the generator, and not part of a manufacturing process that is separate from the generation of electricity.

(5) Large load customer--a customer that requests a new or expanded interconnection where the total load at a single site is equal to or greater than 75 megawatts (MW), and as of September 1, 2025, was not modeled in ERCOT's Network Operations Model as part of a generation resource private use network (PUN) or an energy storage resource PUN.

(6) Large load interconnection study--has the same meaning as defined in ERCOT protocols.

(7) Net metering arrangement--a contractual arrangement in which an existing generation resource and a large load customer agree to net the generation resource's output with the customer's load for settlement purposes based on a metering scheme approved by ERCOT.

(8) Stand-alone energy storage resource--an energy storage resource that, as of September 1, 2025, was included in ERCOT's Network Operations Model and such model of the resource site did not include a PUN load.

(9) Stand-alone generation resource--a generation resource that, as of September 1, 2025, was included in ERCOT's Network Operations Model and such model of the resource site did not include a PUN load.

(10) Stranded transmission asset--a transmission asset that, as a result of a net metering arrangement, is no longer providing service to the public or may otherwise be retired from service without impairing the ability of the transmission system to provide adequate transmission service to customers.

(11) System--the bulk power system in the ERCOT region.

(12) Underutilized transmission asset--a transmission asset that, as a result of a net metering arrangement, is expected to transmit on an average, annual basis at least 25% less power and is not providing significant reliability benefits to the system commensurate with its maximum capacity to transmit power.

(c) Commission approval required. A power generation company, municipally owned utility, or electric cooperative must not implement a net metering arrangement involving a large load customer and an existing generation resource unless the net metering arrangement is approved by the commission.

(d) Initiating the process for approval of a net metering arrangement. Prior to ERCOT commencing its study under subsection (g) of this section, the applicants seeking approval of a net metering arrangement must:

(1) apply to the commission, using a new docket number, for approval of the net metering arrangement by filing an application that meets the requirements of §22.73 of this title (relating to General Requirements for Applications) and includes a copy of the notice submitted to ERCOT; and

(2) upon filing its application with the commission, serve copies of the application, consistent with the requirements in §22.74 of this title (relating to Service of Pleadings and Documents), on:

(A) ERCOT;

(B) the interconnecting electric cooperative, transmission and distribution utility, or municipally owned utility; and

(C) the electric cooperative, transmission and distribution utility, or municipally owned utility that provides electric service at the location of the new net metering arrangement.

(e) Parties to a proceeding under this section.

(1) The parties to a proceeding under this section are limited to:

(A) the applicants;

(B) commission staff;

(D) the interconnecting electric cooperative, transmission and distribution utility, or municipally owned utility.

(2) The parties to a proceeding under this section need not file a motion to intervene.

(f) Discovery.

(1) Discovery may commence on or after the date an application under this section is filed with the commission.

(2) ERCOT is not required to follow the discovery process to obtain the necessary information to conduct its study under subsection (g) of this section.

(3) The presiding officer may establish reasonable deadlines relating to discovery to facilitate the processing of the application within the statutory deadlines.

(g) Commencement of ERCOT study.

(1) The parties to a net metering arrangement must provide ERCOT all information that ERCOT deems necessary regarding the net metering arrangement.

(2) The interconnecting electric cooperative, transmission and distribution utility, or municipally owned utility must submit the following to ERCOT:

(A) a large load interconnection study;

(B) the results of power flow modeling or any other information relevant to a determination of whether stranded or underutilized transmission assets may result from the arrangement; and

(3) Upon receipt of all necessary information, ERCOT must conduct a study of the system impacts of the net metering arrangement, including transmission security and resource adequacy impacts, and stranded or underutilized transmission assets associated with the net metering arrangement. Not later than seven days after commencing its study, ERCOT must file notice in the docket indicating the date that ERCOT commenced its study and the date ERCOT must file its study results and recommendations.

(4) ERCOT must provide to commission staff any access, information, support, or cooperation that commission staff determines is necessary to provide its recommendations under this section.

(h) General requirements of ERCOT study. ERCOT's study of a net metering arrangement must include:

(1) a resource adequacy analysis that is comprised of an evaluation of:

(A) the large load customer's curtailment capability;

(B) on-site back up generation capability to offset the large load customer;

(D) the existing generation resource's availability to ERCOT for dispatch after implementation of the net metering arrangement; and

(E) the impacts of reduced net capability or lower availability on reserve margins or other reliability criteria;

(2) a transmission security analysis that is comprised of a steady state and stability load serving study with and without the generation, under peak scenarios and off-peak scenarios;

(3) an analysis identifying transmission assets that may become stranded or underutilized as a result of the net metering arrangement, including the identity of the transmission service provider (TSP) associated with each such asset and the degree to which any transmission assets are expected to be underutilized from both a delivery and a reliability perspective; and

(4) any other analysis or study that ERCOT determines is necessary.

(i) ERCOT study results. Not later than ten days before ERCOT files its study results and recommendations, ERCOT must file notice in the docket indicating the date that ERCOT expects to file its study results and recommendations. Not later than 120 days after ERCOT's filing indicating ERCOT received all information it deems necessary to conduct its study regarding the net metering arrangement, ERCOT must file its study results and associated recommendations. ERCOT's filing must include:

(1) direct testimony supporting the filing;

(2) an executive summary of the study, including any ERCOT recommendations, that identifies:

(A) the large load customer;

(B) whether the large load customer seeks a new or expanded interconnection;

(C) whether the large load customer or any other customer is already located at the requested interconnection site and if so, that customer's peak demand at the requested interconnection site;

(D) whether ERCOT identified any negative impacts to system reliability, including transmission security and resource adequacy impacts;

(E) ERCOT's recommendation to approve, with or without conditions, or deny the net metering arrangement; and

(F) whether ERCOT recommends conditions to mitigate an impact to transmission security, resource adequacy, or both;

(3) the complete study, detailing:

(A) ERCOT's analysis;

(B) the underlying assumptions used in the study;

(D) the capacity made available to the ERCOT region by the existing generation resource at the time of annual peak demand each of the last 10 years and how that existing generation resource can comply with a requirement to make at least that same amount of dispatchable capacity available after implementation of the net metering arrangement, as applicable; and

(E) whether ERCOT identified any negative impacts to resource adequacy that cannot be mitigated with curtailment of the large load customer; and

(F) whether any transmission assets are stranded or underutilized, including the degree to which any underutilized transmission assets are underutilized from a delivery or a reliability perspective, and the identity of the associated TSPs;

(4) a detailed explanation of the basis for any conditions that ERCOT recommends and the extent to which those conditions are expected to mitigate a reliability risk to the system; and

(5) any other information that ERCOT relied on or considered.

(j) Procedural schedule. After ERCOT files its study results and recommendations, the presiding officer must set a procedural schedule that will enable the commission to issue an order in the proceeding within 60 days of ERCOT's filing.

(1) The procedural schedule must be substantially similar to the following:

(A) the deadline for the applicants to file a statement of position or direct testimony is five days after ERCOT files its study results and recommendations;

(B) the deadline for ERCOT and the interconnecting electric cooperative, transmission and distribution utility, or municipally owned utility to file a statement of position, direct testimony, or an objection to the net metering arrangement is ten days after ERCOT files its study results and recommendations;

(D) the deadline for ERCOT to file a response to other parties' filings is 15 days after ERCOT files its study results and recommendations;

(E) the deadline for commission staff to file a statement of position or direct testimony, including its recommendations, is 17 days after ERCOT files its study results and recommendations;

(F) if no hearing on the merits is requested, the deadline to file a stipulation or agreement, a joint motion to admit evidence, and a joint proposed order is 24 days after ERCOT files its study results and recommendations;

(G) if a hearing on the merits is requested, the hearing on the merits will commence up to 28 days after ERCOT files its study results and recommendations; and

(H) if a hearing on the merits is requested:

(i) the deadline for initial briefs is 34 days after ERCOT files its study results and recommendations; and

(ii) the deadline for reply briefs and proposed orders is 40 days after ERCOT files its study results and recommendations.

(2) Notwithstanding any provision of this section, the presiding officer may set a different procedural schedule than the one set forth in this subsection or adjust any procedural deadlines to facilitate the commission issuing an order in the proceeding within 60 days after ERCOT files its study results and recommendations.

(k) Commission decision. Not later than 60 days after ERCOT files its study results and recommendations, the commission will approve, with or without conditions, or deny an application for a net metering arrangement as necessary to maintain system reliability, including transmission security and resource adequacy impacts.

(1) If the commission approves a net metering arrangement with conditions, then the conditions imposed on the net metering arrangement must include requiring the existing generation resource to make dispatchable capacity available to the ERCOT region as directed by ERCOT in advance of an anticipated emergency condition. The dispatchable capacity made available to the ERCOT region in such an event must be at least equal to the amount of dispatchable capacity that was made available to the ERCOT region before implementation of the net metering arrangement.

(2) The conditions imposed on a net metering arrangement may include requiring:

(A) the retail customer(s) served behind-the-meter to reduce load during certain events;

(B) the existing generation resource to make capacity available to the ERCOT region during certain events;

(C) initiation of a separate hold harmless proceeding for each net metering arrangement that results in stranded or underutilized transmission assets in order to ensure TSPs and their customers are held harmless;

(D) maximum ramp rates for load curtailment; and

(E) any other requirement that is necessary to maintain system reliability.

(3) If the commission imposes a condition that requires a large load customer served behind the meter to reduce load, ERCOT must include any such load reduction when calculating any price adjustments for reliability deployments.

(4) If the commission imposes a condition requiring a hold harmless proceeding and the TSP associated with the stranded or underutilized transmission assets was not a party to the proceeding in which the commission considered approving, with or without conditions, or denying the proposed net metering arrangement, then commission staff must provide notice to the TSP of the requirement to initiate a hold harmless proceeding under subsection (l) of this section not later than seven days after the commission order imposing the condition. Notice may be served by delivering a copy of the commission order by physical or electronic mail to the TSP's authorized representative or attorney of record in the TSP's last comprehensive base rate case.

(l) Hold harmless proceeding. Within 60 days of a commission order requiring a hold harmless proceeding, each TSP associated with stranded or underutilized transmission assets that result from a net metering arrangement must file an application to quantify the costs associated with such assets and to reflect removal of those costs from the TSP's rates. Such costs must not be included in the TSP's rates in future proceedings absent an explicit commission determination in a comprehensive base rate proceeding that the associated transmission assets are no longer stranded or underutilized, and that the TSP has not otherwise been compensated for those costs. Upon removal from rates, these costs must be collected by the TSP from the existing generation resource owner and the interconnecting large load customer in a proportion determined by the commission or by agreement between the existing generation resource owner and the interconnecting large load customer.

(1) The application must include information sufficient to identify the costs associated with the stranded or underutilized transmission assets.

(2) The parties to a hold harmless proceeding under this subsection are not limited to the parties identified in subsection (e) of this section.

(3) Removal from rates of the costs associated with stranded or underutilized transmission assets, along with all associated depreciation, tax, return, and other cost of service components including an appropriate amount of operations and maintenance expenses, may be implemented in a manner otherwise consistent with the ratemaking treatments associated with an interim update of transmission rates under §25.192 of this title (related to Transmission Service Rates), provided that:

(A) increases in costs must not be included in a hold harmless proceeding;

(B) updated billing units are applied when establishing rates reflecting the removal of the appropriate costs associated with the stranded or underutilized transmission assets;

(C) the timeline for approval included in §25.192 does not apply to a hold harmless proceeding under this subsection; and

(D) a hold harmless proceeding under this subsection is not an interim update to a TSP's rates for purposes of determining the frequency of interim updates authorized under §25.192.

(m) Periodic evaluation of conditions imposed. If the conditions imposed on a net metering arrangement under this section are not limited to a specific period, a party to the net metering arrangement must apply for a commission determination of whether the conditions should be extended, with or without modification, or rescinded at least 36 months and not more than 60 months after the order approving the net metering arrangement with conditions.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on September 19, 2025.

TRD-202503310

Andrea Gonzalez

Rules Coordinator

Public Utility Commission of Texas

Earliest possible date of adoption: November 2, 2025

For further information, please call: (512) 936-7244

SUBCHAPTER O. UNBUNDLING AND MARKET POWER

DIVISION 2. INDEPENDENT ORGANIZATIONS

16 TAC §25.370

The Public Utility Commission of Texas (commission) proposes new 16 Texas Administrative Code (TAC) §25.370 relating to ERCOT Large Load Forecasting Criteria. This proposed rule will implement Public Utility Regulatory Act (PURA) §37.0561(m) as enacted by Senate Bill (SB) 6 during the Texas 89th Regular Legislative Session. The new rule will identify the criteria that a large load customer must meet for inclusion in the load data that a transmission and/or distribution service provider (TDSP) submits to ERCOT for purposes of developing the load forecasts that ERCOT uses for its transmission planning and resource adequacy models and reports.

Growth Impact Statement

(1) the proposed rule will not create a government program and will not eliminate a government program;

(2) implementation of the proposed rule will not require the creation of new employee positions and will not require the elimination of existing employee positions;

(3) implementation of the proposed rule will not require an increase and will not require a decrease in future legislative appropriations to the agency;

(4) the proposed rule will not require an increase and will not require a decrease in fees paid to the agency;

(5) the proposed rule will create a new regulation, but this regulation harmonizes a new statutory provision with the language in an existing rule that serves a similar regulatory function;

(6) the proposed rule will not expand, limit, or repeal an existing regulation;

(7) the proposed rule will not change the number of individuals subject to the rule's applicability; and

(8) the proposed rule will not affect this state's economy.

Fiscal Impact on Small and Micro-Businesses and Rural Communities

Takings Impact Analysis

The commission has determined that the proposed rule will not be a taking of private property as defined in chapter 2007 of the Texas Government Code.

Fiscal Impact on State and Local Government

Public Benefits

Ms. Horn has determined that for each year of the first five years the proposed section is in effect the public benefit anticipated as a result of enforcing the section will be more accurate load forecast data to inform transmission planning and resource adequacy in ERCOT. There will be no probable economic cost to persons required to comply with the rule under Texas Government Code §2001.024(a)(5).

Local Employment Impact Statement

Costs to Regulated Persons

Texas Government Code §2001.0045(b) does not apply to this rulemaking because the commission is expressly excluded under subsection §2001.0045(c)(7).

Public Hearing

Public Comments

The amount of the study fee in proposed subsection (c)(3) and the amount of security or contribution in aid of construction that a large load customer is required to pay to demonstrate financial commitment under proposed subsection (c)(4) will be addressed in Project No. 58481, Rulemaking to Implement Large Load Interconnection Standards Under PURA §37.0561. Questions for comment related to these topics were filed in Project No. 58481 on September 12, 2025. Therefore, the commission invites specific comments on these topics in Project No. 58481.

Statutory Authority

The new rule is proposed under Public Utility Regulatory Act (PURA) §14.001, which grants the commission the general power to regulate and supervise the business of each public utility within its jurisdiction and to do anything specifically designated or implied by this title that is necessary and convenient to the exercise of that power and jurisdiction; §14.002, which authorizes the commission to adopt and enforce rules reasonably required in the exercise of its powers and jurisdiction; §37.056, which requires the commission to consider historical load, forecasted load growth, and additional load currently seeking interconnection, including load for which the electric utility has yet to sign an interconnection agreement, as determined by the electric utility with the responsibility for serving the load, when considering need for additional service; §37.0561, which requires the commission by rule to establish criteria by which ERCOT includes forecasted large load of any peak demand in the organization's transmission planning and resource adequacy models and reports; §39.151, which grants the commission authority to oversee ERCOT; and §39.166, which requires ERCOT to use forecasted electrical load, as reasonably determined by the certificated transmission service provider, to identify each region in which transmission capacity is insufficient to meet the region's existing and forecasted electrical load.

Cross Reference to Statute: Public Utility Regulatory Act §14.001; §14.002; §37.0561; §37.0561; §39.151; and §39.166.

§25.370. ERCOT Large Load Forecasting Criteria.

(a) Purpose. The purpose of this section is to establish criteria for a large load customer to be included in ERCOT's load forecasts for transmission planning and resource adequacy models and reports.

(b) Definitions. The following words and terms, when used in this section, have the following meanings unless the context indicates otherwise:

(1) Large load customer--An entity seeking interconnection of one or more facilities at a single site with an aggregate new load or load addition greater than or equal to 25 megawatts (MW) behind one or more common points of interconnection (POI) or service delivery points.

(2) Load--non-coincident peak demand in MW.

(3) Transmission and/or distribution service provider--the electric utility, municipally owned utility, or electric cooperative that is certificated to provide retail electric service at the site that a large load customer seeks to interconnect or the transmission service provider delegated authority by the electric utility, municipally owned utility, or electric cooperative to act on its behalf for purposes of providing information to ERCOT under this section.

(c) Criteria for inclusion in ERCOT load forecast. A large load customer's forecasted demand must not be included in an ERCOT load forecast used for transmission planning or resource adequacy unless the large load customer executed and securitized an interconnection agreement or meets the following criteria:

(1) disclosed to the TDSP whether it is pursuing a separate request for electric service, the approval of which would result in the customer materially changing, delaying, or withdrawing the interconnection request, and if so, the location, size, and anticipated timing of energization associated with such request;

(2) demonstrated to the TDSP site control for the proposed load location through an ownership interest, lease, or other means accepted in the applicable commission rule for large load interconnection standards;

(3) paid a study fee to the TDSP that is the greater of $100,000 or an amount that is set by the applicable commission rule for large load interconnection standards;

(4) demonstrated financial commitment to the TDSP by means of:

(A) payment of security on a dollar per megawatt basis as set by the applicable commission rule for large load interconnection standards;

(B) payment of contribution in aid of construction; or

(C) payment of security provided under an agreement that requires the large load customer to pay for significant equipment or services in advance of signing an agreement to establish electric delivery service;

(5) provided a load ramping schedule to the TDSP, if applicable;

(6) submitted an attestation to the TDSP that attests significant, verifiable progress toward completion of site-related studies and engineering services required for project development before energization (e.g., water, wastewater, or gas); and

(7) submitted an attestation to the TDSP that attests significant, verifiable progress toward obtaining state and local regulatory approvals required for project development before energization (e.g., water, air, or backup generation permits, or city or county building permits).

(d) Submission of forecasted load data to ERCOT. At the time that a TDSP submits its load data to ERCOT through a mechanism designated by ERCOT, the TDSP must also submit to ERCOT a notarized attestation sworn to by the TDSP's highest-ranking representative, official, or officer with binding authority over the TDSP, attesting that each large load customer included in the TDSP's load data meets the criteria set forth in subsection (c) of this section for inclusion in ERCOT's load forecast. Not later than ten working days after a TDSP reasonably determines there is a change in its load data submitted to ERCOT, a TDSP must report the change to ERCOT by updating its load data.

(e) ERCOT forecast. Using the load data provided by TDSPs under subsection (d) of this section, ERCOT must develop load forecasts for the ERCOT region.

(1) Validation of load data. ERCOT and commission staff may access information collected by a TDSP to ensure compliance with this section and validate load data submitted by a TDSP. If load data submitted by a TDSP cannot be validated, the data must be excluded from the load forecast developed by ERCOT.

(2) Adjustments to load data. ERCOT, in consultation with commission staff, may make adjustments to the load data provided by a TDSP under this section based on actual historical realization rates or other objective, credible, independent information. ERCOT must provide the TDSP with the data and calculations used to adjust the forecasted load.

(3) Use of load forecasts. ERCOT's load forecasts must use the load data provided by TDSPs under this section in its transmission planning and resource adequacy models and reports. Applicable adjustments to the load forecast may be made to accommodate differences in study scope, time horizons, and modeling details.

(f) Confidential information. Customer-specific or competitively sensitive information obtained under this section is confidential and not subject to disclosure under Chapter 552 of the Texas Government Code.

(g) ERCOT compliance. ERCOT must develop the necessary protocols to ensure its 2026 Regional Transmission Plan complies with this section. If ERCOT cannot timely implement the protocols to ensure the 2026 Regional Transmission Plan complies with this section, then ERCOT, in consultation with commission staff, must submit a compliance plan to the commission, detailing how it will ensure the 2026 Regional Transmission Plan complies with this section.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on September 19, 2025.

TRD-202503311

Andrea Gonzalez

Rules Coordinator

Public Utility Commission of Texas

Earliest possible date of adoption: November 2, 2025

For further information, please call: (512) 936-7244