Relating to test years used for ratemaking purposes by certain water and sewer utilities.

SB 1891 changes how Texas water and sewer utilities (Class A, B, C, or D) select the time period, called a "test year," used to set their rates. Utilities must now choose a 12-month period starting no later than 18 months after filing for a rate change and ending no earlier than 18 months before that filing. The test year can include past, future, or combined data, ensuring a standardized timeframe for rate calculations. This applies to all rate proceedings starting September 1, 2025, and requires rates to allow a reasonable return on investment while preserving utility financial health.