Texas HB2712 modifies ratemaking for water and sewer utilities by allowing them to select a test year for rate setting.

Texas HB2712 amends the Water Code to allow water and sewer utilities to select a test year for ratemaking purposes. The regulatory authority must base rates on the utility's selected test year, which can include historic, future, or combined data, starting within 18 months of the utility's intent to change rates and ending no earlier than 18 months before the rate change. The bill also specifies that rates should permit utilities to earn a reasonable return on their invested capital and preserve financial integrity.

Texas HB2712 modifies ratemaking for water and sewer utilities by allowing them to select a test year for rate setting.

Texas HB2712 amends the Water Code to allow water and sewer utilities to select a test year for ratemaking purposes. The regulatory authority must base rates on the utility's selected test year, which can include historic, future, or combined data, starting within 18 months of the utility's intent to change rates and ending no earlier than 18 months before the rate change. The bill also specifies that rates should permit utilities to earn a reasonable return on their invested capital and preserve financial integrity.