Notwithstanding any other provision of law, any private water system utility which serves less than 1,000 customers and purchases its water from a municipal water system in a Class 8 municipality may elect to be exempt from all regulation of the Public Service Commission and subject to regulation by the municipality from which it purchases its water in the manner set forth in this section. An initial election under this section shall be effective upon filing of a written notification to the Public Service Commission and the municipality, and shall remain effective until and unless revoked in the same manner. Any private water system utility making an election under this section may maintain its rates and charges which are in effect at the time of the election without further approval from the municipality. The municipality shall thereafter approve any changes in rates and charges for the private water system utility that are fair, just, and reasonable to the water system and the customers. Approval of the changes may be set forth in a water purchase agreement between the private water system and the municipality, or by other written means, and may allow for prospective rate adjustments based on specified criteria.
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