The State of Texas and Office of Public Utility Counsel, Petitioners v. Public Utility Commission of Texas And…

Summary

The Texas Supreme Court held that the Public Utility Commission has authority under the Public Utility Regulatory Act (PURA) to allow utilities to defer post‑service operating and carrying costs incurred during regulatory lag, affirming the appellate court in part and reversing and remanding it in part. The Court rejected the State’s arguments that such deferrals exceed statutory authority, violate the rate‑base definition, or constitute retroactive ratemaking, and noted that the agency’s action was subject to abuse‑of‑discretion review. Justice Spector dissented, arguing the majority’s approach improperly shifts risk to ratepayers.