Monitoring the Session

HB 2868

Metcalf Bill Presumes A Utility’s Debt-Equity Mix Is Reasonable

Died in committee

Verdict: No flags

No flagsInitial review
Rep. Will MetcalfRHouse 16

Initial review · graded Oct 22, 2026 · Headline, summary and grade are analysis of the bill text, not a finding about any person · How we grade

Caption

relating to the consideration of the proportion of long-term debt and equity capitalization in establishing the rates of certain electric utilities.

Caption from analyzed text · version H.

Summary

Regulators who disagree must use the national average equity ratio. Open rate cases count too.

This bill tells Texas utility regulators to presume that an electric utility's proposed mix of debt and equity is reasonable when the utility builds that mix from its own books for the latest financial quarter, using the same method as its earnings monitoring reports. It touches only electric utilities that operate entirely inside ERCOT, and the ratepayers who pay their rates. If regulators find the utility's numbers unreasonable, they must use the national average equity ratio for electric utilities instead of picking their own figure, and the rule applies to any rate case without a final order when the Act takes effect.

Labels

Labels: ACROSS THE AISLE. Joint authors: 1 Republican, 1 Democrat. Party as the Legislative Reference Library lists it for the 89th Legislature.GOT HALFWAY. Passed the House on May 15, 2025. Died in the Senate: never got out of the Business & Commerce committee.

Receipt

The receipt

89R-HB2868 · 2025-02-14

SOLD BY

Rep. Will MetcalfRHouse 16 Rep. Rafael AnchíaDHouse 103

ITEM

relating to the consideration of the proportion of long-term debt and equity capitalization in establishing the rates of certain electric utilities.

WHAT IT DOES

Regulators who disagree must use the national average equity ratio. Open rate cases count too.

This bill tells Texas utility regulators to presume that an electric utility's proposed mix of debt and equity is reasonable when the utility builds that mix from its own books for the latest financial quarter, using the same method as its earnings monitoring reports. It touches only electric utilities that operate entirely inside ERCOT, and the ratepayers who pay their rates. If regulators find the utility's numbers unreasonable, they must use the national average equity ratio for electric utilities instead of picking their own figure, and the rule applies to any rate case without a final order when the Act takes effect.

CHARGES

[ ] NONE FOUND

TOTAL

No significant fiscal implication to the State is anticipated.

LBB estimate · fiscal note version H · source

Sources

Fiscal note · version H · May 1, 2025

No first-year general revenue figure available here.

LBB published estimates · flow over the stated periods.

Source snapshot 2026-10-19, Central time.

HISTORY

  1. Filed
  2. Read first time
  3. Referred to State Affairs
  4. Scheduled for public hearing on . . .
  5. Considered in public hearing
  6. Committee substitute considered in committee
  7. Testimony taken/registration(s) recorded in committee
  8. Left pending in committee
  9. Considered in formal meeting
  10. Committee substitute considered in committee
  11. Reported favorably as substituted
  12. Comte report filed with Committee Coordinator
  13. Committee report distributed
  14. Committee report sent to Calendars
  15. Considered in Calendars
  16. Placed on General State Calendar
  17. Read 2nd time
  18. Passed to engrossment
  19. Record vote RV#2509
  20. Statement(s) of vote recorded in Journal
  21. Read 3rd time
  22. Passed
  23. Record vote RV#2626
  24. Statement(s) of vote recorded in Journal
  25. Reported engrossed
  26. Received from the House
  27. Read first time
  28. Referred to Business & Commerce
FILED UNDER

DATA CENTERS, WATER AND THE GRID

THE TEXT

…“the regulatory authority shall presume the proportion of debt and equity proposed by the utility is reasonable”…

Bill text, House committee report version (H)

The bill shifts the starting point in ERCOT rate cases toward the utility's own capital structure, which shapes the return that ratepayers fund on the grid.

SIGNED FOR BY

House · 129 yea · 11 nay

Sources

House: Final passage · May 15, 2025. Journal. Published stock for this vote. Snapshot 2026-10-19, Central time.

All floor motions and other positions below.

No flags

THANK YOU FOR CHECKING THE RECEIPT

CAMPAIGN PAID FOR BY

CAMPAIGN PAID FOR BY

Will Metcalf

Donors

Texans for Lawsuit Reform PAC$150KAssociated Republicans of Texas Campaign Fund$54KDustin Burrows Campaign$45K

Not tied to this bill.

Sources

The author's campaign account only. Own money and internal transfers are separate on the member page.

Derived itemized flow · Nov 7, 2024 to Oct 19, 2026. State data as of Nov 4, 2026.

Derived itemized contributions on live regular reports and uncovered special-session dates. Internal account transfers and daily reports are excluded.

Texans for Lawsuit Reform PAC$149,922.40

Texans for Lawsuit Reform PAC

$149,922.40

Cash
$70,000.00
Paid by others
$79,922.40
Total
$149,922.40
advertising $37,500.00polling $27,750.00mail $14,372.40fundraiser $300.00

Also funds 124 other sitting lawmakers.

Derived recipient stock · Jul 10, 2024 to Oct 23, 2026. State data as of Nov 4, 2026.

TEC account match.

Team
Sources

Derived itemized flow · Nov 8, 2024 to Aug 12, 2026. State data as of Nov 4, 2026.

Derived itemized contributions on live regular reports and uncovered special-session dates. Internal account transfers and daily reports are excluded.

Report IDs: 100982185, 100998989, 101030949, 101035543, 101059927, 101068041.

Associated Republicans of Texas Campaign Fund$54,402.88

Associated Republicans of Texas Campaign Fund

$54,402.88

Cash
$0.00
Paid by others
$54,402.88
Total
$54,402.88
television $52,000.00text $1,402.88digital $1,000.00

Also funds 20 other sitting lawmakers.

Derived recipient stock · Nov 4, 2024 to Oct 23, 2026. State data as of Nov 4, 2026.

TEC account match.

Team
Sources

Derived itemized flow · Jun 25, 2025 to Jan 27, 2026. State data as of Nov 4, 2026.

Derived itemized contributions on live regular reports and uncovered special-session dates. Internal account transfers and daily reports are excluded.

Report IDs: 100998989, 101034987, 101035543.

Dustin Burrows Campaign$45,000.00

Dustin Burrows Campaign

$45,000.00

Cash
$35,000.00
Paid by others
$10,000.00
Total
$45,000.00
polling $10,000.00

Also funds 39 other sitting lawmakers.

Derived recipient stock · Sep 13, 2025 to Sep 23, 2026. State data as of Nov 4, 2026.

Name match, not a verified identity: normalized filed name and state.

Team
Sources

Derived itemized flow · Dec 29, 2025 to Jan 26, 2026. State data as of Nov 4, 2026.

Derived itemized contributions on live regular reports and uncovered special-session dates. Internal account transfers and daily reports are excluded.

Report IDs: 101030949, 101035543.

Money

Missing data does not establish zero giving. Display amounts are rounded.

×

Texans for Lawsuit Reform PAC

$149,922.40

Cash
$70,000.00
Paid by others
$79,922.40
Total
$149,922.40
advertising $37,500.00polling $27,750.00mail $14,372.40fundraiser $300.00

Also funds 124 other sitting lawmakers.

Derived recipient stock · Jul 10, 2024 to Oct 23, 2026. State data as of Nov 4, 2026.

TEC account match.

Team
Sources

Derived itemized flow · Nov 8, 2024 to Aug 12, 2026. State data as of Nov 4, 2026.

Derived itemized contributions on live regular reports and uncovered special-session dates. Internal account transfers and daily reports are excluded.

Report IDs: 100982185, 100998989, 101030949, 101035543, 101059927, 101068041.

×

Associated Republicans of Texas Campaign Fund

$54,402.88

Cash
$0.00
Paid by others
$54,402.88
Total
$54,402.88
television $52,000.00text $1,402.88digital $1,000.00

Also funds 20 other sitting lawmakers.

Derived recipient stock · Nov 4, 2024 to Oct 23, 2026. State data as of Nov 4, 2026.

TEC account match.

Team
Sources

Derived itemized flow · Jun 25, 2025 to Jan 27, 2026. State data as of Nov 4, 2026.

Derived itemized contributions on live regular reports and uncovered special-session dates. Internal account transfers and daily reports are excluded.

Report IDs: 100998989, 101034987, 101035543.

×

Dustin Burrows Campaign

$45,000.00

Cash
$35,000.00
Paid by others
$10,000.00
Total
$45,000.00
polling $10,000.00

Also funds 39 other sitting lawmakers.

Derived recipient stock · Sep 13, 2025 to Sep 23, 2026. State data as of Nov 4, 2026.

Name match, not a verified identity: normalized filed name and state.

Team
Sources

Derived itemized flow · Dec 29, 2025 to Jan 26, 2026. State data as of Nov 4, 2026.

Derived itemized contributions on live regular reports and uncovered special-session dates. Internal account transfers and daily reports are excluded.

Report IDs: 101030949, 101035543.

Votes2

House May 15, 2025

Yea
129
Nay
11
Present, not voting
2
Absent
1
Excused
7
Names

Named positions matched to lawmakers. See the journal for unmatched names.

House journal

Sources

Record 2626

HB 2868 was passed by (Record 2626): 129 Yeas, 11 Nays, 2 Present, not voting.

Published stock of positions for this vote, except where marked derived.

  • Yea: 129 (published)
  • Nay: 11 (published)
  • Present, not voting: 2 (published)
  • Absent: 1 (derived from named list)
  • Excused: 7 (derived from named list)

House journal. Source snapshot 2026-10-19, Central time.

House May 14, 2025

Yea
111
Nay
17
Present, not voting
2
Absent
12
Excused
8
Names

Named positions matched to lawmakers. See the journal for unmatched names.

House journal

Sources

Record 2509

CSHB 2868 was passed to engrossment by (Record 2509): 111 Yeas, 17 Nays, 2 Present, not voting.

Published stock of positions for this vote, except where marked derived.

  • Yea: 111 (published)
  • Nay: 17 (published)
  • Present, not voting: 2 (published)
  • Absent: 12 (derived from named list)
  • Excused: 8 (derived from named list)

House journal. Source snapshot 2026-10-19, Central time.

Witnesses21
For
9
Against
10
On
2
Names

For

  • AEP Texas3 registrations
  • Association of Electric Companies of Texas1 registration
  • CenterPoint Energy1 registration
  • Greater Houston Partnership1 registration
  • MasTec1 registration
  • Oncor Electric Delivery1 registration
  • Texas New Mexico Power (TNMP)1 registration

Against

  • Alfred R. Herrera1 registration
  • BASF Corporation1 registration
  • Freeport LNG1 registration
  • Lone Star Chapter Sierra Club1 registration
  • Oxy1 registration
  • Samsung1 registration
  • Steering Committee of Cities Served by Oncor and Texas Coalition for Affordable Power1 registration
  • Targa Resources1 registration
  • Texas Association of Manufacturers1 registration
  • Texas Chemistry Council1 registration

On

  • Public Utility Commission of Texas1 registration
  • Self1 registration
Sources

21 parsed registrations across the loaded witness lists.

Derived stock of witness registrations. Repeated appearances count separately. Organizations and self-representation appear as printed.

House witness list. Source snapshot 2026-10-20, Central time.

Fiscal

No significant fiscal implication to the State is anticipated.

LBB estimate · fiscal note version H · source

Sources

Fiscal note · version H · May 1, 2025

No first-year general revenue figure available here.

LBB published estimates · flow over the stated periods.

Source snapshot 2026-10-19, Central time.

How this was graded

Analysis of text version H by claude-opus-5-5, Oct 22, 2026, against the published rubric.

Sources

Texas House · Filed Feb 14, 2025

05/16/2025 S Referred to Business & Commerce

Texas Legislature Online · Introduced · House Committee Report · Engrossed

Data snapshot Oct 26, 2026 at 4:19 AM CDT. Grades, charges, quotes and corrections follow the published record.

House committee · State Affairs · Committee vote 15 aye, 0 nay · Out of committee

Senate committee · Business & Commerce · Final status: Died in committee

Subjects

Utilities--Electric

ELECTRIC RELIABILITY COUNCIL OF TEXAS (ERCOT)

Text

The text as introduced · 348 words

89R6164 SCR-F

By: Metcalf
H.B. No. 2868

A BILL TO BE ENTITLED

AN ACT

relating to the consideration of the proportion of long-term debt

and equity capitalization in establishing the rates of certain

electric utilities.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subchapter B, Chapter 36, Utilities Code, is

amended by adding Section 36.068 to read as follows:

Sec. 36.068. CONSIDERATION OF PROPORTION OF LONG-TERM DEBT

AND EQUITY CAPITALIZATION. (a) This section applies only to an

electric utility that operates solely within ERCOT.

(b) Except as provided by Subsection (c), in considering an

electric utility's capitalization ratio when establishing the

utility's rates, the regulatory authority shall presume the return

on the utility's invested capital is reasonable if calculated:

(1) using the utility's actual proportion of long-term

debt and equity capitalization as reported on the utility's most

recent quarterly financial statement issued before the initiation

of the applicable rate proceeding; and

(2) in a manner consistent with the methodology

included in earnings monitoring reports.

(c) If the regulatory authority finds that the

capitalization ratio calculated in Subsection (b) is unreasonable,

the regulatory authority shall calculate the reasonable return on

the utility's invested capital using an equity capitalization ratio

equal to the national average for electric utility operating

companies.

SECTION 2. (a) Section 36.068, Utilities Code, as added by

this Act, applies only to a proceeding for the establishment of

rates for which the regulatory authority has not issued a final

order or decision before the effective date of this Act.

(b) A proceeding for which the regulatory authority has

issued a final order or decision before the effective date of this

Act is governed by the law in effect immediately before that date,

and that law is continued in effect for that purpose.

SECTION 3. This Act takes effect immediately if it receives

a vote of two-thirds of all the members elected to each house, as

provided by Section 39, Article III, Texas Constitution. If this

Act does not receive the vote necessary for immediate effect, this

Act takes effect September 1, 2025.