(a) An incorporated city or town may make a reasonable lawful charge for the use of a city street, alley, or public way by a public utility in the course of its business.
(b) The total charges, however designated or measured, may not exceed two percent of the gross receipts of the public utility for the sale of gas or water within the city.

(c) The total charges, however designated or measured, relating to distribution service of an electric utility or transmission and distribution utility within the city may not exceed the amount or amounts prescribed by § 33.008, Utilities Code. The charges paid by an electric utility or transmission and distribution utility under this subsection may be only for distribution service.
(d) If a public utility taxed under this subchapter pays a special tax, rental, contribution, or charge under a contract or franchise executed before May 1, 1941, the city shall credit the payment against the amount owed by the public utility on any charge allowable under Subsection (a) of this section.
(e) In this section:
(1) “Distribution service” has the meaning assigned by § 33.008, Utilities Code.
(2) “Electric utility” has the meaning assigned by § 31.002, Utilities Code.
(3) “Public utility” means:
(A) a person who owns or operates a gas or water works or water plant used for local sale and distribution located within an incorporated city or town in this state; or
(B) an electric utility or transmission and distribution utility providing distribution service within an incorporated city or town in this state.
(4) “Transmission and distribution utility” has the meaning assigned by § 31.002, Utilities Code.