LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION March 25, 2025 TO: Honorable Ken King, Chair, House Committee on State Affairs FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HB2869 by Metcalf (Relating to a financing mechanism allowing electric utilities to obtain recovery of costs associated with a weather-related event or other natural disaster; granting authority to issue bonds.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for HB2869, As Introduced: a negative impact of ($1,380,770) through the biennium ending August 31, 2027. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill. General Revenue-Related Funds, Five- Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact toGeneral Revenue Related Funds2026($690,385)2027($690,385)2028($690,385)2029($690,385)2030($690,385)All Funds, Five-Year Impact: Fiscal Year Probable Savings/(Cost) fromGeneral Revenue Fund1 Change in Number of State Employees from FY 20252026($690,385)3.02027($690,385)3.02028($690,385)3.02029($690,385)3.02030($690,385)3.0 Fiscal AnalysisThe bill would amend Utilities Code to allow an electric utility to apply for securitization and the issuance of system restoration bond costs of $50 million or more in a calendar year. The Public Utility Commission of Texas (PUC) would be required to issue an order within 150 days after the application is filed.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION
March 25, 2025
TO: Honorable Ken King, Chair, House Committee on State Affairs FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HB2869 by Metcalf (Relating to a financing mechanism allowing electric utilities to obtain recovery of costs associated with a weather-related event or other natural disaster; granting authority to issue bonds.), As Introduced
TO: Honorable Ken King, Chair, House Committee on State Affairs
FROM: Jerry McGinty, Director, Legislative Budget Board
IN RE: HB2869 by Metcalf (Relating to a financing mechanism allowing electric utilities to obtain recovery of costs associated with a weather-related event or other natural disaster; granting authority to issue bonds.), As Introduced
Honorable Ken King, Chair, House Committee on State Affairs
Honorable Ken King, Chair, House Committee on State Affairs
Jerry McGinty, Director, Legislative Budget Board
Jerry McGinty, Director, Legislative Budget Board
HB2869 by Metcalf (Relating to a financing mechanism allowing electric utilities to obtain recovery of costs associated with a weather-related event or other natural disaster; granting authority to issue bonds.), As Introduced
HB2869 by Metcalf (Relating to a financing mechanism allowing electric utilities to obtain recovery of costs associated with a weather-related event or other natural disaster; granting authority to issue bonds.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB2869, As Introduced: a negative impact of ($1,380,770) through the biennium ending August 31, 2027. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
Estimated Two-year Net Impact to General Revenue Related Funds for HB2869, As Introduced: a negative impact of ($1,380,770) through the biennium ending August 31, 2027. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
General Revenue-Related Funds, Five- Year Impact:
2026 ($690,385)
2027 ($690,385)
2028 ($690,385)
2029 ($690,385)
2030 ($690,385)
All Funds, Five-Year Impact:
2026 ($690,385) 3.0
2027 ($690,385) 3.0
2028 ($690,385) 3.0
2029 ($690,385) 3.0
2030 ($690,385) 3.0
Fiscal Analysis
The bill would amend Utilities Code to allow an electric utility to apply for securitization and the issuance of system restoration bond costs of $50 million or more in a calendar year. The Public Utility Commission of Texas (PUC) would be required to issue an order within 150 days after the application is filed.
Methodology
Based on the analysis of the PUC, as the cost to rate payers increases as storm costs continue to rise after each occurrence, more electric utilities will apply for a securitization of system restoration bond. This estimate assumes the agency would require 3.0 additional full time equivalents (FTE) positions to implement the provisions of the bill within the 150 days of filling. An Attorney III ($115,500 per year with estimated benefits of $32,825) position would be needed for case proceedings. A Financial Examiners IV-V position ($100,000 per year with estimated benefits of $28,420) would be needed for rate regulation pertaining to securitization of a bond. Lastly, an Engineer III-V position ($115,500 per year with estimated benefits of $32,825) would be needed for expertise and knowledge of electric utilities. Other associated costs include $7,215 per year for payroll contributions, travel, and other operating expenses. This estimate also assumes PUC would require $250,000 per year in professional fees and services to hire an outside financial advisor to provide market analysis on bond pricing.
Technology
PUC anticipates information technology expenditures of $8,100 per year.
Local Government Impact
No significant fiscal implication to units of local government is anticipated.
Source Agencies: b > td > 304 Comptroller of Public Accounts, 473 Public Utility Commission of Texas
304 Comptroller of Public Accounts, 473 Public Utility Commission of Texas
LBB Staff: b > td > JMc, WP, GDZ, JBel
JMc, WP, GDZ, JBel