Honorable Brian Birdwell, Chair, Senate Committee on Natural Resources
FROM:
Jerry McGinty, Director, Legislative Budget Board
IN RE:
HB143 by King (Relating to the authority of the Railroad Commission of Texas and the Public Utility Commission of Texas to address a failure by an operator to maintain an electrical power line serving a well site or certain surface facilities in accordance with the National Electrical Code.), As Engrossed
Estimated Two-year Net Impact to General Revenue Related Funds for HB143, As Engrossed: an impact of $0 through the biennium ending August 31, 2027.
The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
General Revenue-Related Funds, Five- Year Impact:
Fiscal Year
Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2026
$0
2027
$0
2028
$0
2029
$0
2030
$0
All Funds, Five-Year Impact:
Fiscal Year
Probable (Cost) from Oil & Gas Regulation 5155
Change in Number of State Employees from FY 2025
2026
($8,956,016)
29.0
2027
($6,749,026)
29.0
2028
($4,704,026)
29.0
2029
($4,704,026)
29.0
2030
($4,704,026)
29.0
Fiscal Analysis
The bill would amend the Natural Resources Code to expand the requirements for an operator when constructing, operating, and maintaining an electrical power line serving a well site or other surface facility employed in operations incident to oil and gas development and production to include that the actions must be in accordance with rules established by the Public Utility Commission (PUC) in the Texas Administrative Code (TAC) in Sections 25.94 Report on Infrastructure Improvement and Maintenance, 25.95 Electric Utility Infrastructure Storm hardening, and 25.96 Vegetation Management as those provisions existed on September 1, 2025, if the operator would be a utility as defined by Utilities Code, Section 11.04 engaged in the maintenance of an electronic transmission and distribution system.
The bill would require the Railroad Commission (RRC) to notify the PUC and the operator within three days if a condition is discovered during an inspection that would involve an electrical power line, pole, or any other related electrical equipment that does not meet the new standards and poses a risk of causing a fire or injury to a person. The bill would require the PUC and RRC to collaborate and notify the landowner of the condition and inform the landowner of the actions the commission and the Public Utility Commission of Texas will take to resolve the condition in accordance with the requirements of the bill no later than 10 days after the PUC receives the notification.
Methodology
According to the RRC, the provisions of the bill would require the agency to conduct inspections under both the National Electrical Code (NEC) and PUC maintenance rules for utilities in the TAC. The agency reports that PUC rules include more requirements for operators than the NEC which will expand the scope and effort of performing utility inspections. According to the RRC, additional staff would be required due to the shorter notification timeframes for electrical concern analysis, notifications, and PUC/RRC collaborative resolution decision making.
For the purposes of this analysis, the table above assumes General Revenue-Dedicated Oil and Gas Regulation and Cleanup Account No. 5155 (GRD 5155) would be used to cover the cost of implementing the provisions of the bill. If revenue collections and the GRD 5155 fund balance should become insufficient to pay for all costs, this analysis assumes that General Revenue Funds would be used instead.
Based on information provided by the RRC, it is assumed that $8,956,016 in would be required in fiscal year 2026, $6,749,026 in fiscal year 2027, $4,704,026 in each fiscal year after and 29.0 FTEs to implement the provisions of the bill. This includes salaries for four different teams: 8.0 FTEs for the Austin Electric Concern Resolution Team, to gather information from landowner complaints and RRC inspections, analyze the information, and develop solutions; 10.0 FTEs for the District Office Enforcement Team, for inspections, documenting electrical concerns, coordinating inspections with state fire marshals or local government officials that request an RRC representative assist with their investigation at the oil and gas site; 8.0 FTEs for the Legal Enforcement Team, for legal enforcements and hearings related to violations related to electrical concerns; and 3.0 FTEs for IT Systems and Support Staff, to incorporate the new requirements into the existing systems for inspections and administrative hearings.
Amounts in the table above include salary costs totaling $2,137,874 in fiscal year 2026 and each subsequent fiscal year; employee retirement benefits totaling $607,584 in fiscal year 2026 and each subsequent fiscal year; agency payroll contributions totaling $32,068 in fiscal year 2026 and each subsequent fiscal year; other operating costs totaling $435,000 in fiscal year 2026 and $217,500 each subsequent fiscal; and equipment costs totaling $434,000 in fiscal year 2026 and each subsequent fiscal year. Costs also include $329,490 in fiscal year 2026 for six trucks for inspections.
Amounts in the table above also include $4,980,000 in fiscal year 2026, $3,320,000 in fiscal year 2027, and $1,275,000 in fiscal year 2028 and each subsequent fiscal year technology costs. These include changes to the Inspection, Compliance, and Enforcement system to document and track violations and corrections; a new external online functionality allowing landowners or lessees to report sub-standard conditions; the development of a new notification system to notify the PUC and the landowners within the specified time frame; modifications to the Hearings and Enforcement systems to accommodate the new case types and track the process of violations and resolutions; integration of data from the oil and gas inspection system and the data submitted from landowners/lessee with the new notification system; and new reporting features to the track electrical inspections, PUC coordination, and electric utility notifications.
Technology
Technology costs include $4,980,000 in fiscal year 2026; $3,320,000 in fiscal year 2027; and $1,275,000 in fiscal year 2028 and each subsequent fiscal year for multiple upgrades to multiple systems.
Local Government Impact
The fiscal implications of the bill cannot be determined at this time.
Source Agencies:
455 Railroad Commission, 473 Public Utility Commission of Texas