1. (a) An electric utility's net income is the total revenues of the utility less all reasonable and necessary expenses as determined by the regulatory authority.
2. (b) The regulatory authority shall determine revenues and expenses in a manner consistent with this subchapter.
3. (c) The regulatory authority may adopt reasonable rules with respect to whether an expense is allowed for ratemaking purposes.

Acts 1997, 75th Leg., ch. 166, Sec. 1, eff. Sept. 1, 1997.