Texas Codes

Tex. Water Code § 12.013 (2026)

Rate-fixing Power

✓ current as of May 2026

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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.

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.

Notes of Decisions

Cited in 11 cases (4 in the last 5 years), 1981–2025 · leading case: Texas Water Comm'n v. Brushy Creek Mun. Util. Dist., 917 S.W.2d 19 (Tex. 1996).

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Texas Water Comm'n v. Brushy Creek Mun. Util. Dist., 917 S.W.2d 19 (Tex. 1996). · cites it 4× “Significantly, the amended committee substitute, the version of the bill ultimately enacted by the Legislature, eliminated this limitation on the Commission’s jurisdiction.”

T.F.W. Mgmt., Inc. v. Westwood Shores Prop. Owners Ass'n, 162 S.W.3d 564 (Tex. App. 2005). · cites it 2× “See TEX. WATER CODE § 12.013(a) ("The commission shall fix reasonable rates for the furnishing of raw or treated water.”

Trinity Water Reserve, Inc. v. Evans, 829 S.W.2d 851 (Tex. App. 1992). “The defendants pleaded that the plaintiffs could not demonstrate that they would suffer an irreparable injury absent or lacking injunctive relief; and further, that the plaintiffs did actually have an adequate remedy at law as set forth in Tex. Water Code Ann. § 12.013 (Vernon…”

Canyon Reg'l Water Auth. v. Guadalupe-Blanco River Auth., 286 S.W.3d 397 (Tex. App. 2008). “See Tex. WateR Code Ann. § 12.013 (Vernon 2008).”

Pub. Util. Comm'n of Texas & North Fort Bend Water Auth. v. City of Fulshear, Texas (Tex. App. 2025). · cites it 15× “xiii, 2 TEX. WATER CODE § 12.013 ................”

Pub. Util. Comm'n of Texas & North Fort Bend Water Auth. v. City of Fulshear, Texas (Tex. App. 2025). · cites it 13× “The Commission has jurisdiction over appeals filed under Texas Water Code section 13.043 and rate-fixing jurisdiction under Texas Water Code section 12.”

Pub. Util. Comm'n of Texas & North Fort Bend Water Auth. v. City of Fulshear, Texas (Tex. App. 2025). · cites it 6× “31 Tex. Water Code § 12.013 ................”

City of Dallas v. the Sabine River Auth. of Texas (Tex. App. 2015). · cites it 4× “4 Tex. Water Code § 12.013 ................”

McAllen Pub. Util. v. Othal E. Brand, Jr. in His Off. Capacity as Bd. President, Chris Burns in His Off. Capacity as Vice President, Mark Freeland in His Off. Capacity as Sec'y, W.D. Moschel in His Off. Capacity as Member, Lance Neuhaus in His Off. Capacity as Member of the Bd. of Directors of Hidalgo Cnty. Water Improvement Dist. No. 3 (Tex. App. 2024). · cites it 2× “TEX. WATER CODE ANN. § 12.013 (stating that the PUC “shall fix reasonable rates for the furnishing of raw or treated water for any purpose mentioned in Chapter 11 or 12 of this code” (emphasis added)).”

Pub. Util. Comm'n of Texas v. City of Sherman, 632 S.W.2d 624 (Tex. App. 1981). “More interesting is appellees’ contention that PURA § 17(e), if given the meaning we attribute to it, conflicts with several other statutory provisions, from which conflict appellees conclude that our construction must be erroneous. Appellees refer to PURA § 26(c); 1979 Tex.”

Canyon Reg'l Water Auth. v. Guadalupe-Blanco River Auth., the Texas Comm'n on Env't Quality, & Margaret Hoffman in Her Off. Capacity as Exec. Dir. of the Texas Comm'n on Env't Quality (Tex. App. 2008). “See Tex. Water Code Ann. § 12.013 (Vernon 2008).”

— Tex. Water Code § 12.013(a) — 6 cases

Texas Water Comm'n v. Brushy Creek Mun. Util. Dist., 917 S.W.2d 19 (Tex. 1996). “Significantly, the amended committee substitute, the version of the bill ultimately enacted by the Legislature, eliminated this limitation on the Commission’s jurisdiction.”

T.F.W. Mgmt., Inc. v. Westwood Shores Prop. Owners Ass'n, 162 S.W.3d 564 (Tex. App. 2005). “See TEX. WATER CODE § 12.013(a) ("The commission shall fix reasonable rates for the furnishing of raw or treated water.”

Pub. Util. Comm'n of Texas & North Fort Bend Water Auth. v. City of Fulshear, Texas (Tex. App. 2025). “xiii, 2 TEX. WATER CODE § 12.013 ................”

Pub. Util. Comm'n of Texas & North Fort Bend Water Auth. v. City of Fulshear, Texas (Tex. App. 2025). “The Commission has jurisdiction over appeals filed under Texas Water Code section 13.043 and rate-fixing jurisdiction under Texas Water Code section 12.”

McAllen Pub. Util. v. Othal E. Brand, Jr. in His Off. Capacity as Bd. President, Chris Burns in His Off. Capacity as Vice President, Mark Freeland in His Off. Capacity as Sec'y, W.D. Moschel in His Off. Capacity as Member, Lance Neuhaus in His Off. Capacity as Member of the Bd. of Directors of Hidalgo Cnty. Water Improvement Dist. No. 3 (Tex. App. 2024). “TEX. WATER CODE ANN. § 12.013 (stating that the PUC “shall fix reasonable rates for the furnishing of raw or treated water for any purpose mentioned in Chapter 11 or 12 of this code” (emphasis added)).”

— Tex. Water Code § 12.013(d) — 4 cases

Pub. Util. Comm'n of Texas & North Fort Bend Water Auth. v. City of Fulshear, Texas (Tex. App. 2025). “xiii, 2 TEX. WATER CODE § 12.013 ................”

Pub. Util. Comm'n of Texas & North Fort Bend Water Auth. v. City of Fulshear, Texas (Tex. App. 2025). “31 Tex. Water Code § 12.013 ................”

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