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Texas ALJ Backs Alternative Mechanism To Return TC Charge Refunds To Retail Electric Providers

March 3, 2026

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Copyright 2026 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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A Texas ALJ has recommended approval of an alternative mechanism, which relies on existing market processes, to refund to Texas retail electric providers an over-collection of about $15 million which has been collected under the TC5 transition charge rider at CenterPoint Energy Houston Electric

CenterPoint Houston had initially stated that it would distribute the entirety of the TC5 over-collection balance to retail electric providers (REPs) through individual refunds to each of the REPs, in a lump sum, based on the proportion of TC5 transition charges each REP remitted from August 1, 2023 to July 31, 2024 (the date that the TC5 charge ended).

In response to requests from the Texas REP Coalition, CenterPoint Houston proposed an alternative refund mechanism under which the TDU would refund or otherwise disburse the TC5 final account balance through a proposed Rider TC5 Refund tariff mechanism, over a forecasted six-month period beginning on May 1, 2026.

Rider TC5 Refund would make use of existing billing mechanisms utilized by CenterPoint Houston and REPs via Texas Standard Electronic Transactions (Texas SET).

In a proposed order endorsing the alternative Rider TC5 Refund tariff mechanism, an ALJ stated, "It is in the public interest to approve a distribution method that can be implemented to benefit retail customers and that conforms with the Commission’s intention expressed in the Finding of Fact 64 of the Financing Order that the remaining collection account amounts should be credited to retail customers."

The proposed credits to REPs under the recommended alternative Rider TC5 Refund mechanism would be:

Rider TC5 Refund

Residential           ($0.000278) Per kWh 
Secondary < 10 kVA    ($0.000329) Per kWh 
Secondary > 10 kVA    ($0.102410) Per kVA* 
Primary               ($0.103137) Per kVA*
Transmission          ($0.069930) Per 4CP kVA 
Lighting              ($0.000557) Per kWh

* Amount is Per Billing kVA

Rider TC5 Refund is proposed to be effective May 1, 2026, and is expected to be in effect for a period of six months. However, Rider TC5 Refund would remain in effect until the aggregate over-collection balance is exhausted regardless of the length of time required to achieve a full refund, with the rider terminating upon such exhaustion

Docket 59113

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