According to the Legislative Budget Board (LBB), HB 2869 is projected to have a negative fiscal impact on the state’s General Revenue Fund totaling approximately $1.38 million over the 2026–2027 biennium. This cost arises from the bill’s requirements that the Public Utility Commission of Texas (PUC) review and act on securitization applications within a strict 150-day timeline, which is expected to increase the frequency and complexity of utility applications due to rising storm-related costs.

To meet these demands, the PUC anticipates the need for three new full-time employees: an attorney for case proceedings, a financial examiner for bond rate regulation, and an engineer specializing in electric utility systems. These positions will incur combined annual personnel costs of roughly $690,000, including salaries and benefits. Additionally, the PUC projects annual expenditures of $250,000 for outside financial advisory services to evaluate bond market conditions and pricing. The agency also expects minor annual IT costs of $8,100 to support system updates and operational needs.

There is no anticipated fiscal impact on local governments. However, this legislation will likely result in more frequent and resource-intensive regulatory proceedings at the state level, as utilities respond to more frequent extreme weather events with securitization requests.

HB 2869 proposes to expand the availability of securitization financing to all Texas electric utilities, including those operating within the Electric Reliability Council of Texas (ERCOT). The bill allows utilities to apply to the Public Utility Commission of Texas (PUC) for the issuance of system restoration bonds for estimated and actual storm-related costs of $50 million or more in a calendar year. The goal is to reduce borrowing costs for utilities, provide them with quicker access to capital for storm recovery, and ultimately stabilize service to consumers following extreme weather events. The PUC would be required to issue a financing order within 150 days of application, and system restoration charges would be subject to true-up and reconciliation once final costs are known.

The bill’s intent aligns with the practical goals of improving system resiliency and cost efficiency for utilities following natural disasters. However, several concerns merit amendments before full support can be given. First, the bill shifts financial risk from utilities to ratepayers by allowing securitization of estimated costs without clear accountability provisions. This creates a moral hazard in which utilities may be incentivized to overstate recovery needs or underinvest in resiliency, knowing that securitization offers guaranteed cost recovery. The lack of consumer-side checks, such as public hearings, cost caps, or shared utility responsibility, could lead to excessively long-term charges on utility customers.

Second, HB 2869 modestly increases the size and scope of state government. The PUC will be required to expand its regulatory infrastructure by hiring three new full-time employees (an attorney, a financial examiner, and an engineer) and contracting financial advisors to analyze securitization proposals. The projected cost to taxpayers is nearly $1.4 million over the 2026–2027 biennium, representing a new recurring burden on the General Revenue Fund. While the bill does not create a new agency, it deepens the PUC’s responsibilities and dependence on external consulting to fulfill its duties within the new statutory timeline.

Third, the bill increases the regulatory complexity and burden at the state level. While utilities may benefit from faster access to capital, the PUC must now evaluate not just actual costs but speculative, estimated ones, which are subject to later adjustments. This expands the scope and sensitivity of financial oversight and creates long-term monitoring obligations for the commission.

Despite these concerns, the core policy goal—ensuring affordable and timely cost recovery for critical infrastructure restoration—is valid and consistent with efforts to enhance statewide grid reliability. Therefore, while Texas Policy research recommends that lawmakers vote YES on HB 2869, we also strongly suggest lawmakers consider amendments to preserve key liberty principles.

 Suggested Amendments: Consumer protection measures, such as cost-sharing by utilities or limitations on ratepayer exposure; Transparency requirements, including public comment or independent audits before PUC approval; Sunset or periodic review provisions, to evaluate whether the expanded securitization authority remains necessary and effective; Clarification on the scope and duration of securitized charges, to limit open-ended liabilities.

With these improvements, HB 2869 can achieve its intended benefits while preserving key principles of limited government, personal responsibility, and free enterprise, and ensuring that ratepayer accountability is not compromised. Texas Policy Research recommends that lawmakers vote YES on HB 2869.

• Individual Liberty: The bill does not directly restrict or enhance personal freedoms such as privacy, speech, or association. However, ratepayers will bear the financial burden of securitized system restoration charges, which may be based on estimated (not actual) costs. While not a direct infringement on liberty, this could erode individual economic freedom if customers are compelled to absorb costs without meaningful input or challenge. A lack of transparency or public process in determining these charges would heighten this concern.
• Personal Responsibility: The bill raises a moral hazard by enabling utilities to recover large-scale restoration costs, potentially stemming from their own planning failures, without bearing the financial consequences. By securitizing estimated costs, utilities are shielded from some of the natural economic consequences of poor risk management, which dilutes the principle of accountability. Without provisions requiring utilities to share in the cost burden or demonstrate proactive storm preparedness, the bill undermines incentives for responsible corporate behavior.
• Free Enterprise: The securitization mechanism in the bill can be seen as financially beneficial for utilities, reducing their borrowing costs and freeing up capital for operations. This supports economic stability in the energy market. However, the guaranteed recovery through system restoration charges may function as a form of government-backed protection, potentially distorting market dynamics by insulating utilities from competitive pressures. A more market-aligned approach would require utilities to absorb some risk, thereby preserving competition and prudent financial behavior.
• Private Property Rights: The bill does not affect ownership rights directly. However, authorizing charges on utility customers to repay securitized bonds affects how individual financial resources (i.e., personal income used for utility payments) are allocated. While this isn’t a direct infringement, the lack of public engagement or customer consent regarding these charges, especially when based on preliminary cost estimates, can be seen as an indirect limitation on individuals’ control over their property (money).
• Limited Government: The bill requires the expansion of the Public Utility Commission’s workforce, introduces more complex regulatory procedures, and commits public resources (approximately $1.4 million over the biennium) to support securitization oversight. This represents a clear increase in the size and operational scope of government. Moreover, by setting a 150-day mandate for the PUC to issue financing orders, the bill reduces deliberative flexibility and may lead to rushed or inadequately vetted financial approvals. The absence of sunset clauses or periodic legislative review adds to the concern that this expansion of authority is open-ended.

• SB 1963 (Same As)