Who Sets Utility Rates in Texas? The Public Utility Commission (PUC)

In Texas, the Public Utility Commission of Texas (PUC or PUCT) is the independent state agency responsible for regulating and setting rates for electricity and telecommunications (landline, some wireless).

Structure & Authority

• Composition: Three Commissioners appointed by the Governor, confirmed by the Texas Senate. 6-year staggered terms.
• Independence: Not part of the Governor's office or Legislature. Quasi-judicial rate-setting.
• Statutory Mandate: Public Utility Regulatory Act (PURA) — ensure "just and reasonable" rates, reliable service, customer protection.

Electricity Regulation (ERCOT Market)

• Retail Competition: Most of Texas (ERCOT) = deregulated retail. You choose Retail Electric Provider (REP). PUC sets Transmission & Distribution Utility (TDU) rates (wires charges — Oncor, CenterPoint, AEP, TNMP). These are ~40% of bill.
• Wholesale Market: PUC oversees ERCOT (grid operator) rules, scarcity pricing (System-Wide Offer Cap = $5,000/MWh), ancillary services.
• Rate Cases: TDUs file for rate changes (e.g., Oncor 2024). PUC adjudicates: evidentiary hearings, intervenors, final order.

Telecommunications Regulation

• ILECs (Incumbent Local Exchange Carriers — AT&T, Frontier, etc.): PUC sets basic local rate caps, universal service fund (Texas USF), carrier-to-carrier compensation.
• CLECs / Wireless: Mostly deregulated. PUC handles consumer complaints, slamming/cramming, numbering, 911.
• Broadband: PUC administers Broadband Development Office (BDO) (federal BEAD funds, state pole attachment rules).

Consumer Voice

• Office of Public Utility Counsel (OPC): Independent state agency representing residential/small business consumers in PUC proceedings.
• Public Comment: File comments on open dockets (PUC Interchange).
• Complaints: PUC Consumer Hotline: 1-888-782-8477.

Key Distinction

Gas utilities (Atmos, CenterPoint Gas, Texas Gas Service) are regulated by the Railroad Commission of Texas (RRC) — not PUC. Water/wastewater = TCEQ (mostly) or PUC (investor-owned).