A municipally owned utility is subject to this subchapter if the utility is a utility:
(1) whose rates are appealed under Subchapter D;
(2) for which the commission orders a decrease in annual nonfuel base revenues that exceeds the greater of $25,000,000 or 10 percent of the utility’s nonfuel base revenues, as computed on a total system basis without regard to the utility’s municipal boundaries and established in the appealed rate ordinance; and
(3) for which the commission finds that the rates paid by the combined residential or other major customer class, other than a class in which the municipality is the customer of the municipally owned utility, are removed from cost-of-service levels to the extent that, under the nonfuel base revenue requirement adopted by the commission as computed on a total system basis without regard to the municipality’s boundaries, a change in nonfuel base rate revenues in excess of 50 percent from adjusted test year levels would be required to move that class to a relative rate of return of unity (1.00 or 100 percent) under the cost-of-service methodology adopted by the commission in an appeal under Subchapter D.