Texas Governor Signs Bill Ending General Land Office's Authority To Sell Retail Electricity State Power Program

New Law Ends Gross Receipts Tax On Public School District Customers, Mandates REPs Pass-Through Savings

May 20, 2019

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Reporting by Paul Ring • ring@energychoicematters.com

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Texas Governor Greg Abbott has signed HB 2263 which terminates the authority of the Texas General Land Office to sell retail electricity (currently done via a contracted REP, which is Cavallo Energy Texas, a wholly-owned subsidiary of Calpine) under the State Power Program

HB 2263 allows the GLO, or an entity operating under a contract with the General Land Office, to continue to provide retail electric service under the terms of an agreement with a customer entered into before the effective date of the bill, but only until the date the agreement expires, except that, any such agreement may be extended to a date not later than January 1, 2024.

The law also provides that tax may not be imposed on the gross receipts from the sale of electricity to a public school district customer, effective January 1, 2024.

Furthermore, the law requires REPs to pass-through any such tax savings to customers as follows: "As soon as practicable after January 1, 2024, a retail electric provider, as defined by Section 31.002, Utilities Code, shall adjust the billing of a public school district customer to reflect any decrease in the retail electric provider's tax liability to this state if the decrease is attributable to the exemption in Section 182.022(d), Tax Code, as added by this Act. An adjustment must be made effective at the same time as the decrease of tax liability or as soon after that decrease occurs as is reasonably practicable."

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