Texas Water Code - WATER § 13.182. Just and Reasonable Rates

(a) The regulatory authority shall ensure that every rate made, demanded, or received by any utility or by any two or more utilities jointly shall be just and reasonable.

(b) Except as provided by Subsection (b-1), rates may not be unreasonably preferential, prejudicial, or discriminatory but shall be sufficient, equitable, and consistent in application to each class of consumers.

(b-1) In establishing a utility's rates, the regulatory authority may authorize the utility to establish reduced rates for a minimal level of service to be provided solely to a class of elderly customers 65 years of age or older to ensure that those customers receive that level of service at more affordable rates.  The regulatory authority shall allow a utility to establish a fund to receive donations to recover the costs of providing the reduced rates.  A utility may not recover those costs through charges to the utility's other customer classes.

(c) For ratemaking purposes, the utility commission may treat two or more municipalities served by a utility as a single class wherever the utility commission considers that treatment to be appropriate.

(d) The utility commission by rule shall establish a preference that rates under a consolidated tariff be consolidated by region.  The regions under consolidated tariffs must be determined on a case-by-case basis.