Texas § 12.013 RATE-FIXING POWER.

Texas Statutes

§ 12.013 — RATE-FIXING POWER.

Texas § 12.013

Code WAWater Code

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Bluebook

Tex. Water Code Code Ann. § 12.013 (2026).

Text

Sec. 12.013. RATE-FIXING POWER.

(a)The utility commission shall fix reasonable rates for the furnishing of raw or treated water for any purpose mentioned in Chapter 11 or 12 of this code.

(b)In this section, "political subdivision" means municipalities, counties, river authorities, water districts, and other special purpose districts.

(c)The utility commission in reviewing and fixing reasonable rates for furnishing water under this section may use any reasonable basis for fixing rates as may be determined by the utility commission to be appropriate under the circumstances of the case being reviewed; provided, however, the utility commission may not fix a rate which a political subdivision may charge for furnishing water which is less than the amount required to meet the debt service and

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Sec. 12.013. RATE-FIXING POWER. (a) The utility commission shall fix reasonable rates for the furnishing of raw or treated water for any purpose mentioned in Chapter 11 or 12 of this code.
(b) In this section, "political subdivision" means municipalities, counties, river authorities, water districts, and other special purpose districts.
(c) The utility commission in reviewing and fixing reasonable rates for furnishing water under this section may use any reasonable basis for fixing rates as may be determined by the utility commission to be appropriate under the circumstances of the case being reviewed; provided, however, the utility commission may not fix a rate which a political subdivision may charge for furnishing water which is less than the amount required to meet the debt service and bond coverage requirements of that political subdivision's outstanding debt.
(d) The utility commission's jurisdiction under this section relating to a municipality shall be limited to water furnished by the municipality to another political subdivision, other than another municipality, on a wholesale basis.
(e) The utility commission may establish interim rates and compel continuing service during the pendency of any rate proceeding.
(f) The utility commission may order a refund or assess additional charges from the date a petition for rate review is received by the utility commission of the difference between the rate actually charged and the rate fixed by the utility commission, plus interest at the statutory rate.
(g) In a proceeding under this section or Chapter 11 to review a rate charged under a written contract, the utility commission may not hold a hearing on or otherwise prescribe just and reasonable amounts to be charged under the contract unless the utility commission determines that the amount charged under the contract harms the public interest. A determination under this subsection becomes final for purposes of appeal in the manner provided by Section 2001.144 , Government Code.
(h) A party adversely affected by a determination under Subsection (g) may seek judicial review of the determination. Judicial review of a determination under Subsection (g) shall be by trial de novo.
(i) The utility commission shall abate proceedings on the contract in the event of an appeal under Subsection (h) until the entry of a final judicial determination that a rate charged under the contract harms the public interest.
(j) Chapter 2001 , Government Code, applies to an appeal under Subsection (h).
(k) The utility commission shall, before holding a hearing on or otherwise prescribing a just and reasonable rate to be charged under the contract, allow the contracting parties to amend the amount charged under the contract until at least 60 days after the date:
(1) of a final judicial determination in an appeal under Subsection (h) that a rate charged under the contract harms the public interest; or
(2) the determination made under Subsection (g) became final if a motion for rehearing was not filed on time.
(l) If the parties amend their contract under Subsection (k), a party may challenge before the utility commission the rate paid under the amended contract only:
(1) after the 5th anniversary of the date of the contract amendment; or
(2) during a period agreed to by the parties that begins after the 5th anniversary of the date of the contract amendment and ends on or before the 25th anniversary of that date.

McAllen Public Utility v. Othal E. Brand, Jr. in His Official Capacity as Board President, Chris Burns in His Official Capacity as Vice President, Mark Freeland in His Official Capacity as Secretary, W.D. Moschel in His Official Capacity as Member, Lance Neuhaus in His Official Capacity as Member of the Board of Directors of Hidalgo County Water Improvement District No. 3

(Court of Appeals of Texas, 2024)

Opinion No.

(Texas Attorney General Reports, 2003)

Texas Water Commission, Trinity Water Reserve, Inc., D/B/A Devers Canal System and Devers Canal Rice Producers Association, Inc. v. Boyt Realty Co., J & E Farms, Inc., Three Dailey Farms, Inc., J. M. Frost, III and Ford J. Frost

(Court of Appeals of Texas, 1999)

Canyon Regional Water Authority v. Guadalupe-Blanco River Authority, the Texas Commission on Environmental Quality, and Margaret Hoffman in Her Official Capacity as Executive Director of the Texas Commission on Environmental Quality

(Court of Appeals of Texas, 2008)

City of Dallas v. the Sabine River Authority of Texas

(Court of Appeals of Texas, 2015)

Legislative History

Amended by Acts 1977, 65th Leg., p. 2207, ch. 870, Sec. 1, eff. Sept. 1, 1977. Amended by: Acts 2013, 83rd Leg., R.S., Ch. 170 (H.B. 1600 ), Sec. 2.07, eff. September 1, 2013. Acts 2013, 83rd Leg., R.S., Ch. 171 (S.B. 567 ), Sec. 7, eff. September 1, 2013. Acts 2021, 87th Leg., R.S., Ch. 307 (S.B. 997 ), Sec. 1, eff. September 1, 2021. Acts 2025, 89th Leg., R.S., Ch. 776 (S.B. 740 ), Sec. 1, eff. September 1, 2025.