Nov. 3 — Utilities’ capital investments are mostly recovered through general rate cases in Texas and are based on historical test years with adjustments for known changes after the end of the test year. Transmission cost of service and distribution cost recovery factor are important interim rate adjustment mechanisms that mitigate regulatory lag between rate cases. Authorized ROEs in the last 10 years are largely in line or slightly better than the sector median at the time of the approval in the last five years. Equity capitalization ratios for electric utilities are lower than those for gas utilities and the industry median.

—  Fitch Ratings