Appellant GTE Southwest (“GTE”) petitioned appellee Public Utility Commission (the “Commission”)1 to increase its 1996 franchise tax “pass-through” to customer-ratepayers pursuant to section 3.211(f) of the Public Regulatory Act of 1995 (“PURA 95”).2 See PURA 95 § S.211(i) (West 1997). The Commission denied GTE’s request based on GTE’s election to be governed by the rate-freeze provisions of Subtitle H of PURA 95. See id. §§ 3.351-.359. The district court affirmed the Commission’s order. On appeal, GTE challenges the Commission’s decision, claiming that the Commission erroneously applied the Subtitle H rate-freeze provision to GTE’s request to increase its 1996 franchise tax “pass-through.” We will affirm.
BACKGROUND AND PROCEDURAL HISTORY
This case concerns the relationship between Subtitle H of PURA 95, and PURA 95 section 3.211(i). To fully understand the issues presented in this case, we will first discuss the statutes in question in some detail.
PURA 95 Section 3.211(i)
In 1991, the Texas Legislature passed House Bill 11 (“H.B.ll”), a comprehensive tax bill that increased franchise and other taxes for most corporations.3 At the same time, the Legislature amended the predecessor of PURA 95 to permit a temporary adjustment to the billings of a public utility to account for the effects of H.B. 11 on the utility’s state franchise tax liability. See PURA 95 § 3.211(i).4 This temporary adjustment provides a mechanism for a utility, like GTE, to recover its increased franchise tax costs, until such costs can be incorporated into the utility’s rates in the utility’s next full-blown rate case. Specifically, PURA 95 section 3.21 l(i) provides:
The commission on its own motion or on the petition of a utility shall provide for the adjustment of a utility’s billing to reflect any increase or decrease of tax liability of the utility to the state resulting from [H.B. 11] and that is attributable to activities that are subject to the jurisdiction of the commission. Any adjustment to billings under this section must be apportioned prorata to all types and classes of service provided by the utility and is effective only until the commission alters the adjustment as provided by this subsection or enters an order for the utility under this section or Section [3.210] of this Act. The adjustment of billings must be made effective at the same time as the increase or decrease of tax liability resulting from [H.B. 11] or as soon after as is reasonably practical. Each year after any original adjustment, the commission shall review the utility’s increase or decrease of tax liability resulting from [H.B. 11] and alter the adjustment to reflect the increase or decrease. A proceeding under this subsection is not a rate case under this section.
PURA 95 § 3.211. Thus, this provision allows the utility to temporarily “pass-through” to its customer-ratepayers the increase in its state franchise tax liability until the utility’s next rate case. Furthermore, it anticipates that the Commission will review and alter the adjustment to reflect additional increases or decreases in H.B. 11 tax liability each year following the original adjustment.
*163In January 1992, the Commission adopted a rule implementing PURA 95 § 3.211(i). See 17 Tex. Reg. 110 (1992). That rule specifies the mechanism by which a utility may temporarily “pass-through” the effect of H.B. 11 on its state franchise tax liability to its customers until its next rate case. See 16 Tex. Admin. Code § 23.21(e) (West 1997) (“Rule 23.21(e)”). Rule 23.21(e) directs all utilities that are eligible for the “pass-through” to file, in December of each year, a tariff setting forth an “interim” H.B. 11 tax adjustment factor for the next calendar year. See id. § 23.21(e)(1),(3). Moreover, the rule requires that the adjustment factor be stated as a percentage of the customer’s bill. See id. § 23.21(e)(6)(B). Finally, the rule prescribes that the proposed “interim” factor be subject to an annual “true-up” or adjustment filed on or before March 1 of the year following the year that the “interim” factor was in effect.
Subtitle H of PURA 95
Four years after the enactment of H.B. 11, Subtitle H was added to PURA 95. Subtitle H was enacted to “provide a framework for an orderly transition from traditional return-on-invested-capital regulation to a fully competitive telecommunications marketplace where all telecommunications providers compete on fair terms.” PURA 95 § 3.351. Under Subtitle H, an incumbent local exchange company (“ILEC”),5 like GTE, may voluntarily opt out of traditional cost-of-service rate regulation under Subtitle E of PURA 95 by notifying the Commission of its election to be regulated under Subtitle H. See id. § 3.352(a). Subtitle H specifies that the notice of election must state the company’s commitment to freeze any increase in the rates charged for covered services for a four-year period. Id.
PURA 95 directs that the services provided by an ILEC, electing Subtitle H regulation, be classified into three categories or “baskets,” each including a variety of services. Basket I (basic network) lists fifteen services;6 Basket II (discretionary) lists eight sendees;7 and Basket III (competitive) lists nine services.8 Id. §§ 3.352(b)(1), .353, .355, .356. With limited exceptions not relevant to this case, an ILEC electing Subtitle *164H incentive regulation is prohibited from increasing rates for Basket I (basic network) services for four years following its election. See id. § 3.358(b). The Subtitle H company may, however, change its rates for Basket II (discretionary) and Basket III (competitive) services largely without any regulatory oversight by the Commission.
The Controversy
Pursuant to PURA 95 section 3.211(i), GTE filed for, and received, a franchise tax adjustment to its billing for the 1992, 1993, 1994, and 1995 tax years. On September 20, 1995, GTE, pursuant to PURA 95 section 3.352, notified the Commission that it voluntarily elected to be subject to Subtitle H incentive regulation. GTE’s letter notifying the Commission of its election states, in part:
This is to notify the Commission that pursuant to Section 3.352 of the Public Utility Regulatory Act of 1995 (“Act”), GTE Southwest Incorporated (“Company”) hereby elects to be regulated under the provisions of Subtitle H of the Act, Incentive Regulation of Telecommunications.
The Company commits to limit any increase in the rates charged for services in Section 3.353 of the Act for a four-year period....
Thereafter, on December 1, 1995, GTE filed an application requesting an increase in its interim H.B. 11 franchise tax adjustment factor from its 1995 level of .001759 to .002117 for 1996.9 On April 15,1996, a Commission Administrative Law Judge (“ALJ”) denied GTE’s request for an increase to its H.B. 11 tax adjustment factor as contrary to its commitment to freeze rates for Basket I (basic network) services. The ALJ, however, granted interim approval of GTE’s request for a change in its H.B. 11 tax adjustment factor for its Basket II (discretionary) and Basket III (competitive) servicés. The ALJ therefore directed GTE to “file the necessary tariffs to effectuate this ruling on or before May 1, 1996.” GTE refused to file the increased adjustment factor on Basket II and Basket III services stating that the computation “would be extremely burdensome if not impossible.”
On January 15, 1997, the Commission issued a final order denying GTE’s application for an increase to its H.B. 11 tax adjustment factor relating to Basket I services. The Order also denied GTE’s request for an increase to its H.B. 11 tax adjustment factor for its Basket II (discretionary) and Basket III (competitive) services for a failure to prosecute such requests. The district court affirmed the Commission’s Order. GTE now appeals to this Court the district court’s judgment and the Commission’s order denying its request to increase its 1996 franchise tax adjustment factor pursuant to PURA 95 section 3.211(i).
DISCUSSION
In two points of error, GTE primarily contends that the Subtitle H rate-freeze provision was erroneously applied to its request to increase its 1996 franchise tax adjustment factor pursuant to PURA 95 section 3.211(i). Specifically, GTE argues as follows: the rate-freeze provision applies only to the fifteen services listed as a Basket I (basic network) service; the H.B. 11 tax adjustment factor is not among that list of Basket I services; therefore, the rate-freeze provision is not applicable to its request to increase its 1996 tax adjustment factor pursuant to section 3.211(i).
GTE misconstrues its obligation under Subtitle H of PURA 95. PURA 95 sections 3.352(a) and 3.353(b) clearly state that upon election of Subtitle H, GTE commits itself “to limit any increase” “in rates for basic *165network services” “for a four year period” of time. PURA 95 §§ 3.352(a), .353(b). Given this commitment by GTE, we hold that an increase in GTE’s franchise tax adjustment would be contrary to GTE’s promise and election under Subtitle H.
PURA 95 section 3.211(i) prescribes that “[a]ny adjustment to billings under [section 3.211(i) ] must be apportioned prorata to all types and classes of service provided by the utility_” Id. § 3.211(i). Because this provision requires a prorata increase to “all types” of service, GTE faces the impossible task of keeping its rates for Basket I services at the status quo as prescribed by Subtitle H. See id. §§ 3.352(a), .353(b).
Despite this provision of PURA, the dissent argues that GTE’s requested franchise tax adjustment-increase does not constitute a rate increase, but rather is merely an automatic pass-through or adjustment. This Court has addressed and rejected a similar argument offered by the dissent in two previous cases. See Southwestern Public Serv. Co. v. Public Util. Comm’n, 962 S.W.2d 207 (Tex.App.—Austin 1998, pet. requested); Southwestern Bell Tel. Co. v. Public Util. Comm’n, 863 S.W.2d 754 (Tex.App.—Austin 1993, writ denied).
In Southwestern Bell, we were asked to determine whether a rate-freeze provision contained in a non-unanimous settlement stipulation (“NUS”) agreed to by Southwestern Bell before the enactment of H.B. 11 and section 3.211(i) prohibited Southwestern Bell from seeking a franchise tax adjustment pursuant to the predecessor of section 3.211(i). See Southwestern Bell Tel. Co., 863 S.W.2d at 755-57. The NUS, which Southwestern Bell entered into voluntarily stipulated in part:
Southwestern Bell agrees-not to propose any increase in its local exchange, Service Connection Charges, Direct Inward Dialing (DID), Direct Outward Dialing (DOD), toll (MTS), WATS, 800 Service, Touch-tone, or Access Service tariff rates for four years from the date of Commission approval.
See id. at 758.
In determining whether this agreement prohibited Southwestern Bell from seeking an H.B. 11 franchise tax adjustment, we examined whether “the effect of the tax pass-through resulted in an increase in tariff rates to Southwestern Bell’s Customers” in violation of Southwestern Bell’s rate-freeze agreement. Id. at 758. We concluded that it did. Id. Such an analysis is persuasive under the facts of this case.
As stated above, PURA 95 section 3.211(i) requires the adjustment to be apportioned prorata to all types and classes of services. Thus, an H.B. 11 tax adjustment effectively increases the rates for Basket I services. Therefore, just as we held that the Commission properly prohibited Southwestern Bell from adjusting its franchise tax rates as contrary to its NUS, we sustain the Commission’s action in refusing to allow GTE to “effectively” increase rates on Basket I services in violation of its Subtitle H election.
Moreover, we believe that the facts of this case are even more compelling to prohibit a franchise tax adjustment-increase than the circumstances that were present in Southwestern Bell. Southwestern Bell, unlike GTE, entered into the NUS prior to the enactment of H.B. 11 and the franchise tax adjustment provision. Therefore, Southwestern Bell was able to argue that equitably it should not be deprived of a legislative tax adjustment provision that it had no knowledge of at the time it entered into its rate-freeze agreement. By contrast, in the present case, we are presented with a situation where GTE: (1) knew of the franchise tax adjustment provision and had, in fact, taken advantage of it the previous four years; (2) knew of the Commission’s explicit commentary suggesting the potential loss of the franchise tax adjustment-increase as a direct consequence of entering into a rate-freeze agreement;10 and (3) knew of our *166decision in Southwestern Bell affirming the Commission’s refusal to allow a franchise tax adjustment if the utility had agreed to freeze rates. Armed with this knowledge, GTE voluntarily elected to embrace the incentive regulation provisions of Subtitle H. Thus, while these provisions contain significant benefits for GTE, it is likewise bound to uphold its obligation to freeze rates for Basket I services even if this means the forfeiture of an increase in its franchise tax adjustment.
Finally, in a more recent opinion, we implicitly rejected the exact argument offered by the dissent that a pass-through or an adjustment does not constitute a rate. See Southwestern Public Serv. Co., 962 S.W.2d at 218. In Southwestern, we were asked to determine, inter alia, whether a fuel reconciliation proceeding constituted a ratemaking proceeding. Id. A fuel reconciliation proceeding allows a utility company to reconcile its fuel expenses when its predetermined customer rates result in either over or under recovery for fuel expenses. Based on whether there is an over or under recovery for fuel expenses, the utility must impose either a surcharge or refund on a customer’s bill. See id. at 210.
Important to this appeal was Southwestern’s argument that the fuel reconciliation adjustment did not constitute a ratemaking proceeding because the adjustment to the customer’s bill was not a rate. See id. at 218. In rejecting this argument, we stated that a “rate” includes “every compensation ... charged, or collected whether directly or indirectly by any public utility for any [service] ...” see id.; PURA 96 § 1.003. We held that any proceeding resulting in an increase in compensation to the utility via its customers is, broadly speaking, a ratemaking proceeding. Id. This rationale is instructive in the present cause.
The franchise tax adjustment-increase in the instant cause is analogous to the adjustment in a fuel reconciliation proceeding. They are both “adjustments” to the customer’s utility bill that are done outside of a full-blown rate case. GTE cannot escape our holding in Southwestern that through its pro-rata application, a franchise tax adjustment-increase imposes a prohibited “rate” increase on GTE’s customers for Basket I services. As in Southwestern, we note that a rate also includes every tariff charged by a utility for its service. PURA 95 § 1.003. It is undisputed that the franchise tax adjustment-increase is a “tariff ... charged” by GTE. Therefore, because the requested franchise tax adjustment-increase does increase overall rates for Basket I services as prohibited by Subtitle H, we hold that the Commission did not err in refusing GTE’s request to increase its franchise tax adjustment. We overrule GTE’s points of error.
CONCLUSION
Having overruled GTE’s points of error, we affirm the Commission’s order and the district court’s judgment.
. MCI Telecommunications Corporation is a co-appellee in this cause. For the sake of convenience, we will refer to the co-appellees as the Commission.
. Tex.Rev.Civ. Stat. Ann. art. 1446c-0 (West 1997) ("PURA 95”). In 1997, the Legislature adopted the Texas Utilities Code and codified the provisions of PURA 95. See Act of May 8, 1997, 75th Leg., R.S., ch. 166, § 10, 1997 Tex. Gen. Laws 713, 1018. This codification, however was non-substantive. Therefore, for the sake of consistency with the briefs filed in this appeal, we will cite to the provisions in effect immediately prior to codification.
. Act of Aug. 22, 1991, 72d Leg., 1st C.S., ch. 5, 1991 Tex. Gen. Laws 134.
. The predecessor of PURA 95 contained an almost identical provision to section 3.21 l(i) See Tex.Rev.Civ. Stat. Ann. art. 1446c, § 43(j) (West Supp.1993). For the sake of simplicity we will only refer to PURA 95 section 3.21 l(i).
. An “incumbent local exchange company” is a telecommunications utility that held as of September 1, 1995, a certificate of convenience and necessity to provide local exchange telephone service, basic local telecommunications service, or switched access service within the state. See PURA 95 § 3.002(3), (5). GTE is such a company.
. The following services are Basket I (basic network) services:
(1) flat rate residential and business local exchange telephone service, including primary directory listings and the receipt of a directory and any applicable mileage or zone charges;
(2) tone dialing service;
(3) lifeline and tel-assistance service;
(4) service connection for basic services;
(5) direct inward dialing service for basic services;
(6) private pay telephone access service;
(7) call trap and trace service;
(8) access to 911 service provided by a local authority and access to dual party relay service;
(9) switched access service;
(10) interconnection to competitive providers;
(11) mandatory extended area service arrangements;
(12) mandatory extended metropolitan service or other mandatory toll-free calling arrangements;
(13) interconnection for commercial mobile service providers;
(14) directory assistance; and
(15)"l-plus” intraLATA message toll service.
. The following services are discretionary services:
(1) “1-plus” intraLATA message toll services, if intraLATA equal access is available;
(2) 0 + and 0-operator services;
(3) call waiting, call forwarding, and custom calling features that are not classified as a competitive service under Section 58.151;
(4) call return, caller identification, and call control options that are not classified as a competitive service under Section 58.151;
(5) central office based PBX-type services;
(6) billing and collection services;
(7) integrated services digital network (ISDN) services; and
(8) new services
. The following services are classified as competitive services:
(1) services described in the WATS tariff as the tariff existed on January 1, 1995;
(2) 800 and foreign exchange services;
(3) private line service;
(4) special access service;
(5) services from public pay telephones;
(6) paging services and mobile services (IMTS);
(7) 911 premises equipment;
(8) speed dialing; and
(9) three-way calling.
. The H.B. 11 surcharge factor is simply a percentage factor by which the rates for telecommunications services, including Basket I services, are increased to recover cost-of-service increases in franchise taxes. For example, in 1995, GTE’s surcharge factor was .001759. This means that if a customer purchased only Basket I services, that customer did not pay the tariff rates for those Basket I services; instead, the customer paid 1.001759 times those tariff rates. For 1996, GTE requested an increase in the surcharge factor to .002117. If the Commission had granted this request, then the total charges paid by the customer-ratepayers for Basket I services would have increased. By increasing the amount of money paid by customer-ratepayers for Basket I services, the increases to the surcharge have the effect of increasing the rates for those services. This is expressly forbidden by Subtitle H.
. GTE, unlike Southwestern Bell, was privy to the following commentary by the Commission regarding the effects of a rate-freeze agreement on implementing section 3.21 l(i):
If a utility has agreed to a rate-freeze or similar restriction, the parties agreeing to the stipulation have already in some manner allocated the risk of changing tax laws. The utility has accepted the risk of increasing taxes; the signing ratepayers have accepted the risk of decreasing taxes. In deference to standard means of changing rates and the agreement of *166the parties, the commission should not by rule move to adjust the utility’s bills to decrease rates. Likewise, the commission assumes that the utilities will be willing to honor their previous agreements. The language [of the rule] has been changed so that utilities that have an agreement concerning changes in cost of service will not be required to implement the change.
17 Tex. Reg. 110, 111 (1992); see also Southwestern Bell, 863 S.W.2d at 756.