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Texas ALJ Would Find TCRF Update May Be Included In AEP Texas' New Single Unified Tracking Mechanism (Inclusion Supported by REPs)
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A Texas ALJ would find that AEP Texas' transmission cost recovery factor (TCRF) is appropriately included in a new single annual proceeding to adjust nonfuel rates on a system-wide basis under PURA § 36.216
PURA § 36.216 allows eligible TDUs to use a single unified tracking mechanism (UTM) to reflect changes in transmission and distribution invested capital, rather than using multiple other existing rider mechanisms, such as the distribution cost recovery factor
Certain parties had argued that the TCRF cannot be included in the UTM, as has been sought by AEP Texas. OPUC argued that the TCRF may not be included in the UTM because the TCRF does not reflect invested capital but rather changes in wholesale transmission costs, while PUCT Staff opposed inclusion of the TCRF in the UTM because the TCRF is an expense to the TDU, rather than invested capital
The Texas REP Coalition supported inclusion of the TCRF in the UTM, arguing that such treatment is in harmony with the goal of PURA § 36.216 which is to streamline rate filings while stabilizing retail rates (by reducing the number of rate adjustments that would result if various factors are updated in individual proceedings). REPs said that a single annual update, rather than multiple, separate rate rider updates throughout
the year, holds the potential to provide a better customer experience, through rate stability
In a proposal for decision, an ALJ would find that the TCRF is appropriate to consider in the UTM application.
The ALJ said, "Inclusion of the TCRF in this application aligns with the statutory language and the Commission’s Threshold Order. Moreover, because the TCRF functions as a pass-through mechanism to collect amounts that were originally invested capital costs, those are qualified costs that AEP Texas may collect through a filing under PURA section 36.216."
PUCT Docket 58315
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March 24, 2026
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Copyright 2026 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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