Electricity Laws and Incentives in Texas
The list below contains summaries of all Texas laws and incentives related to electricity.
State Incentives
Alternative Fuel Infrastructure Grants
The Texas Commission on Environmental Quality (TCEQ) administers the Alternative Fueling Facilities Program (AFFP) as part of the Texas Emissions Reduction Plan (TERP). The AFFP offers grants for the construction or reconstruction of an alternative fueling facility for natural gas, hydrogen, biodiesel, propane, electricity, and methanol. Priority will be given to public entities. For more information, including application periods, see the TCEQ TERP website.
(Reference Texas Statutes, Health and Safety Code 386.153 and 393.001-393.007)
Clean Fleet Grants
The Texas Commission on Environmental Quality (TCEQ) administers the Texas Clean Fleet Program (TCFP) as part of the Texas Emissions Reduction Plan (TERP). The TCFP provides grants to fleets to replace existing fleet vehicles with alternative fuel vehicles (AFVs) or hybrid electric vehicles (HEVs). An entity that operates a fleet of at least 75 vehicles and commits to operating at least 25% of total annual mileage in a Clean Transportation Zone may be eligible. Qualifying AFV or HEV replacements must reduce emissions of nitrogen oxides or other pollutants by at least 25% as compared to baseline levels and must replace vehicles that meet operational and fuel usage requirements. Neighborhood electric vehicles do not qualify. For more information, including current application periods, see the TCEQ TERP website.
(Reference Texas Statutes, Health and Safety Code 386 and 392 and Texas Administrative Code Title 30 Part 1 Chapter 114 Subchapter K Division 5 Rule 114.650-114.658)
Clean School Bus Grants
The Texas Commission on Environmental Quality (TCEQ) administers the Texas Clean School Bus (TCSB) Program as part of the Texas Emissions Reduction Plan (TERP). The TCSB program provides grants to public school districts and charter schools for the incremental costs to replace school buses or install diesel oxidation catalysts, diesel particulate filters, emission-reducing add-on equipment, and other emissions reduction technologies in qualified school buses. For more information, including application periods, see the TCEQ TERP website.
(Reference Texas Administrative Code Title 30 Part 1 Chapter 114 Subchapter K Division 4 Rule 114.640-114.648 and Texas Statutes, Health and Safety Code 390)
Clean Vehicle and Infrastructure Grants
The Texas Commission on Environmental Quality (TCEQ) administers the Emissions Reduction Incentive Grants (ERIG) Program as part of the Texas Emissions Reduction Plan (TERP). The ERIG program provides grants for various types of clean air projects to improve air quality in the state’s nonattainment areas and other affected counties. Eligible projects include those that involve replacement, retrofit, repower, or lease or purchase of new heavy-duty vehicles; alternative fuel dispensing infrastructure; idle reduction and electrification infrastructure; and alternative fuel use. For more information, including application periods, see the TCEQ TERP website.
(Reference Texas Statutes, Health and Safety Code 386.101-386.117 and Texas Administrative Code Title 30 Part 1 Chapter 114 Subchapter K Division 3 Rule 114.620-114.629)
Electric Vehicle (EV) and Natural Gas Vehicle (NGV) Weight Exemption
EVs and NGVs may exceed the state’s gross vehicle weight limits by up to 2,000 pounds (lbs.). The EV or NGV maximum gross vehicle weight may not exceed 82,000 lbs.
(Reference Texas Statutes, Transportation Code 621.101)
Electric Vehicle Emissions Inspection Exemption
Vehicles powered exclusively by electricity are exempt from state motor vehicle emissions inspections. For more information, visit the Texas Department of Public Safety website.
(Reference Texas Statutes, Transportation Code 548.301)
Governmental Fleet Grants
The Texas Commission on Environmental Quality (TCEQ) administers the Governmental Alternative Fuel Fleet Grant Program (GAFF) as part of the Texas Emissions Reduction Plan (TERP) for the purchase or lease of new vehicles powered by natural gas, propane, hydrogen, or electricity. Special districts and government entities that operate a fleet greater than 15 vehicles are eligible. For more information, including application periods, see the TCEQ TERP website.
(Reference Texas Statutes, Health and Safety Code 386.153 and 395.001-395.015)
Heavy-Duty Vehicle and Equipment Grants
The Texas Commission on Environmental Quality (TCEQ) administers the Rebate Grants Program (Program) as part of the Texas Emissions Reduction Plan (TERP). The Program provides grants to eligible entities to replace or repower existing heavy-duty, diesel-powered vehicles. Replacement vehicles and engines may not be more than three years older than the calendar year purchased and must reduce nitrogen oxide emissions by at least 25% compared to the vehicle or engine being replaced. Eligible replacement on- and off-road vehicles must be powered by diesel, natural gas, propane, methanol, hydrogen, or electricity. For more information, including current application periods, see the TCEQ Texas Emissions Reduction Plan TERP website.
(Reference Texas Health and Safety Code 386.104)
Light-Duty Alternative Fuel Vehicle Rebates
The Texas Commission on Environmental Quality (TCEQ) administers the Light-Duty Motor Vehicle Purchase or Lease Incentive Program (LDPLIP) as part of the Texas Emissions Reduction Plan (TERP). LDPLIP provides grants for the purchase or lease of a new light-duty vehicle powered by compressed natural gas (CNG), propane, hydrogen, or electricity. CNG and propane vehicles, including bi-fuel vehicles, are eligible for a rebate of up to $5,000. Electric drive vehicles powered by a battery or hydrogen fuel cell, including plug-in hybrid electric vehicles with a battery capacity of at least 4 kilowatt hours, are eligible for a rebate of up to $2,500. One rebate is available per eligible vehicle. Rebates are awarded on a first-come, first-served basis. For more information, including application periods, see the TERP website.
(Reference Texas Statutes, Health and Safety Code 386.154 and Texas Administrative Code Title 30 Part 1 Chapter 114 Subchapter K Division 2 Rule 114.610-114.613)
Seaport and Rail Yard Emissions Reduction Grants
The Texas Commission on Environmental Quality (TCEQ) administers the Seaport and Rail Yard Areas Emissions Reduction (SPRY) Program as part of the Texas Emissions Reduction Plan (TERP). The SPRY program provides grants to eligible entities to replace, repower, or purchase drayage and cargo handling equipment. Eligible projects include heavy-duty on-road vehicles with a gross vehicle weight rating over 26,000 pounds, off-road yard trucks, and other cargo handling equipment. Eligible engines or motors must be powered by electricity or meet federal emissions standards and reduce nitrogen oxide emissions by at least 25% compared to the engine being replaced. For more information, including current application periods, see the TCEQ TERP website.
(Reference Texas Statutes, Health and Safety Code 386.181-386.183)
Texas' National Electric Vehicle Infrastructure (NEVI) Planning
The U.S. Department of Transportation’s (DOT) NEVI Formula Program required the Texas Department of Transportation (TxDOT) to submit an annually updated EV Infrastructure Deployment Plan (Plan) for fiscal years 2022 through 2026 to their FHWA Division Office, describing how the state intended to distribute NEVI funds and their physical and cybersecurity strategies, and including a Community Engagement Outcomes Report. The submitted plans must address updated NEVI Guidance.
For more information about Texas’ NEVI planning process, see the TxDOT Electric Vehicle Infrastructure Plan website.
Laws and Regulations
Alternative Fuel Use and Vehicle Acquisition Requirements
State agency fleets with more than 15 vehicles, excluding emergency and law enforcement vehicles, may not purchase or lease a motor vehicle unless the vehicle uses natural gas, propane, ethanol or fuel blends of at least 85% ethanol (E85), methanol or fuel blends of at least 85% methanol (M85), biodiesel or fuel blends of at least 20% biodiesel (B20), or electricity (including plug-in hybrid electric vehicles). Waivers may be granted for fleets if the fleet will operate primarily in areas where neither the state agency or a supplier can reasonably be expected to establish adequate fueling infrastructure for these fuels or the agency is unable to obtain equipment or fueling facilities necessary to operate alternative fuel vehicles at a cost that is no greater than the net costs of using conventional fuels.
Covered state agency fleets must consist of at least 50% of vehicles that are able to operate on alternative fuels and use these fuels at least 80% of the time the vehicles are driven. Covered state agencies may meet these requirements through the purchase of new vehicles or the conversion of existing vehicles. State agencies that purchase passenger vehicles or other ground transportation vehicles for general use must ensure that at least 25% of the vehicles purchased during any state fiscal biennium, other than exempted vehicles, meet or exceed federal Tier II, Bin 3 emissions standards.
(Reference Texas Statutes, Government Code 2158.004-2158.009)
Alternative Fuel Vehicle (AFV) Registration Tracking Program
The Texas Department of Motor Vehicles (Department) collects data on the number of AFVs registered in the state. The Department must submit an annual report to the Texas Legislature detailing the results of each data collection year. The annual report must include information on electric, hybrid, compressed natural gas, and liquefied natural gas vehicle registrations.
(Reference Texas Statutes, Transportation Code 502.004)
Authorization of Governmental Alternative Fuel Fleet Grant Program
The Texas Commission on Environmental Quality (TCEQ) must administer a grant program for governmental alternative fuel fleets to provide grants for the purchase or lease of a new vehicle and the purchase, lease, or installation of alternative fueling equipment when tied to a vehicle project and suitable fueling is not available within five miles. Eligible alternative fuels include natural gas, propane, hydrogen, and electricity. For electric vehicles and plug in hybrid electric vehicles, the vehicle must achieve at least 75 mpg equivalent or a combined range of 75 miles. State agencies and political subdivisions are eligible to apply for a grant under the program if the entity operates a fleet of more than 15 vehicles. Mass transit and school transportation providers will also be eligible for grants. The vehicle lease or service agreement must be for at least three years.
TCEQ must establish standardized vehicle grant amounts based on the incremental costs associated with the purchase or lease of different categories of motor vehicle, including the fuel type, vehicle class, and other categories TCEQ considers appropriate, and vehicle grants may not exceed the incremental cost. TCEQ will also establish standardized fueling equipment grant amounts, and no more than 10%of annual awards may fund fueling projects.
(Reference Texas Statutes, Health and Safety Code 395.001 – 395.015)
Electric Vehicle (EV) Registration Fee
In addition to standard vehicle registration fees, new EV owners must pay a first-time registration fee of $400. After the first-time registration fee, the fee for EV registration renewal is $200. Fees contribute to the State Highway Fund. Fees do not apply to motorcycles or neighborhood electric vehicles.
(Reference Texas Statutes, Transportation Code 502.360)
Public Electric Vehicle (EV) Charger Inspection Regulations
By December 1, 2024, the Texas Commission of Licensing and Regulation (Commission) was required to adopt rules for EV charger inspections. Those rules are published in the Texas Administrative Code Title 16 Part 4 Chapter 96 Subchapter C. The Commission is authorized to set fees to cover the cost of administering an inspection program and establish exemptions. EV charger station providers must have equipment registered, inspected, and maintained in compliance with the code.
The Texas Department of Licensing and Regulation (TDLR) is authorized to periodically conduct an inspection of EV chargers, including for complaints, to verify compliance with requirements and standards. TDLR must establish methods by which consumers can provide complaints regarding EV chargers.
(Reference Texas Statutes, Occupations Code 2311.0101-2311.0306 and Texas Administrative Code, Title 16, Part 4, Chapter 96)
Public Utility Definition
Electric vehicle charging service providers are not considered retail electric utilities by the Texas Public Utilities Commission when they own or operate equipment used solely to provide charging service for consumption by alternatively fueled vehicles. This exclusion applies statewide.
(Reference Texas Utilities Code 37.001 - 37.002)
Public Utility Electric Vehicle (EV) Charger Policy Design Requirements
Inside the Electric Reliability Council of Texas (ERCOT) territory, transmission and distribution utilities (TDUs) may not directly own or operate public EV chargers and may not include charger costs in commission approved rates. A TDU may affiliate with a competitive entity to provide public charging via a separate entity or third party, only if no station appears within 50 miles on the Department of Energy’s Alternative Fuels Data Center map. Additional terms and conditions apply.
TDUs may construct, own, and operate make ready infrastructure on the utility side of the point of delivery and recover make ready costs at the authorized rate of return. A TDU may own, operate, lease, install, or procure service from a charger on its premises solely to serve the utility’s vehicles.
(Reference Texas Statutes, Utilities Code 42.0104)
Publicly Funded Electric Vehicle (EV) Charger Standards
By Dec. 1, 2024, the Texas Department of Licensing and Regulation (TDLR), in consultation with the Texas Department of Transportation, was required to adopt standards for EV chargers to ensure that the connectors or plugs are widely compatible with as many EVs as practicable. The relevant standards are published in the Texas Administrative Code Title 16, Part 4, Chapter 96 Subchapter A.
EV charging providers shall disclose on the EV charger display the method(s) for calculating the fee to charge, the current rate, and applicable surcharges. Itemized receipts must be made available if requested by a user. EV charger providers shall remove from operation and from digital maps of available chargers any equipment that poses a safety risk. Such chargers shall also be clearly marked “out of order.”
After Dec. 1, 2024, publicly available EV chargers funded through public grants or state rebate programs must meet additional standards adopted by TDLR. For more information see the TDLR EV Charging Stations website .
Exemptions, including for legacy chargers, may apply. Penalties for non-compliance may also apply.
(Reference Texas Statutes, Occupations Code 2311.0206 and 2311.0303 - 2311.0306 and Texas Administrative Code Title 16, Part 4, Chapter 96)
More Laws and Incentives
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