# Tex. Utilities Code § 104.003: JUST AND REASONABLE RATES

> Texas · Statutes · In force

URL: https://www.frixlaw.com/law-library/statutes/STATE_TX_Cut_C104_S104.003

## Section

- **Citation:** Tex. Utilities Code § 104.003
- **Heading:** JUST AND REASONABLE RATES
- **Jurisdiction:** Texas
- **Kind:** Statutes
- **Status:** In force
- **Text as of:** August 14, 2026
- **Source:** Compiled text
- **Location:** TX Code / Code ut / Chapter 104 / Section 104.003

## Text

(a) The regulatory authority shall ensure that each rate a gas utility or two or more gas utilities jointly make, demand, or receive is just and reasonable. A rate may not be unreasonably preferential, prejudicial, or discriminatory but must be sufficient, equitable, and consistent in application to each class of consumer. In establishing a gas utility's rates, the railroad commission may treat as a single class two or more municipalities that a gas utility serves if the commission considers that treatment to be appropriate.

(b) A rate for a pipeline-to-pipeline transaction or to a transportation, industrial, or similar large volume contract customer is considered to be just and reasonable and otherwise to comply with this section and shall be approved by the regulatory authority if:

(1) neither the gas utility nor the customer had an unfair advantage during the negotiations;

(2) the rate is substantially the same as the rate between the gas utility and at least two of those customers under the same or similar conditions of service; or

(3) competition does or did exist with another gas utility, another supplier of natural gas, or a supplier of an alternative form of energy.

(c) Subsection (b) does not apply:

(1) if a complaint is filed with the railroad commission by a transmission pipeline purchaser of gas sold or transported under the pipeline-to-pipeline or transportation rate; or

(2) to a direct sale for resale to a gas distribution utility at a city gate.

(d) The reasonableness of gas purchase costs included in a city gate rate proposed to be charged for a sale for resale to a gas distribution utility at a city gate may be reviewed at a city gate rate proceeding even though the costs have been previously approved as a rate for other parties under Subsection (b).

(e) Subsection (b)(1) does not apply to a rate charged or offered to be charged to an affiliated pipeline utility.

## Nearby sections

- [Tex. Utilities Code § 104.001 § 104.001. AUTHORIZATION TO ESTABLISH AND REGULATE RATES.](https://www.frixlaw.com/law-library/statutes/STATE_TX_Cut_C104_S104.001.md)
- [Tex. Utilities Code § 104.002 § 104.002. COMPLIANCE WITH SUBTITLE.](https://www.frixlaw.com/law-library/statutes/STATE_TX_Cut_C104_S104.002.md)
- [Tex. Utilities Code § 104.003 § 104.003. JUST AND REASONABLE RATES.](https://www.frixlaw.com/law-library/statutes/STATE_TX_Cut_C104_S104.003.md)
- [Tex. Utilities Code § 104.004 § 104.004. UNREASONABLE PREFERENCE OR PREJUDICE PROHIBITED.](https://www.frixlaw.com/law-library/statutes/STATE_TX_Cut_C104_S104.004.md)
- [Tex. Utilities Code § 104.005 § 104.005. EQUALITY OF RATES AND SERVICES.](https://www.frixlaw.com/law-library/statutes/STATE_TX_Cut_C104_S104.005.md)
- [Tex. Utilities Code § 104.006 § 104.006. RATES FOR AREA NOT IN MUNICIPALITY.](https://www.frixlaw.com/law-library/statutes/STATE_TX_Cut_C104_S104.006.md)
- [Tex. Utilities Code § 104.007 § 104.007. DISCRIMINATION AND RESTRICTION ON COMPETITION.](https://www.frixlaw.com/law-library/statutes/STATE_TX_Cut_C104_S104.007.md)
- [Tex. Utilities Code § 104.008 § 104.008. BURDEN OF PROOF.](https://www.frixlaw.com/law-library/statutes/STATE_TX_Cut_C104_S104.008.md)
- [Tex. Utilities Code § 104.051 § 104.051. ESTABLISHING OVERALL REVENUES.](https://www.frixlaw.com/law-library/statutes/STATE_TX_Cut_C104_S104.051.md)
- [Tex. Utilities Code § 104.052 § 104.052. ESTABLISHING FAIR RATE OF RETURN.](https://www.frixlaw.com/law-library/statutes/STATE_TX_Cut_C104_S104.052.md)
- [Tex. Utilities Code § 104.053 § 104.053. COMPONENTS OF ADJUSTED VALUE OF INVESTED CAPITAL.](https://www.frixlaw.com/law-library/statutes/STATE_TX_Cut_C104_S104.053.md)
- [Tex. Utilities Code § 104.054 § 104.054. DEPRECIATION, AMORTIZATION, AND DEPLETION.](https://www.frixlaw.com/law-library/statutes/STATE_TX_Cut_C104_S104.054.md)
- [Tex. Utilities Code § 104.055 § 104.055. NET INCOME; ALLOWABLE EXPENSES.](https://www.frixlaw.com/law-library/statutes/STATE_TX_Cut_C104_S104.055.md)
- [Tex. Utilities Code § 104.056 § 104.056. TREATMENT OF CERTAIN TAX BENEFITS.](https://www.frixlaw.com/law-library/statutes/STATE_TX_Cut_C104_S104.056.md)

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Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/STATE_TX_Cut_C104_S104.003. Check the current official text before relying on it. Not legal advice.