Which entity has the authority to establish its own rate schedule?

The city council has the authority to establish its own rate schedule, particularly for municipal utilities that operate within their jurisdiction. City councils are local governing bodies that can set rates for services like water, electricity, and gas within their communities. This local control allows city councils to tailor rate structures to fit the specific needs and demographics of their communities, ensuring that services are priced in a way that is equitable and sustainable.

In contrast, state regulatory commissions oversee rates for investor-owned utilities at the state level, while the Department of Energy and the Federal Energy Regulatory Commission primarily focus on broader regulatory frameworks and interstate energy issues rather than local rate setting. Therefore, the city council's ability to directly influence and set rates makes it the correct choice in this context.