(a) Municipalities owning or operating facilities for supplying a public service or commodity to its citizens may extend its electric service into rural territory contiguous to the municipality upon order of the Arkansas Public Service Commission.
(b)
(1) Rates and rules for the rural electric service shall be established from time to time by the city council, board of directors, or local water and light commission governing such municipally owned electric utility and without the approval of the Arkansas Public Service Commission.
(2) However, at no time shall the rates for rural territory so served exceed the rates charged to ratepayers receiving service within the municipality, provided, however, that, where the municipality serves less than three thousand (3,000) customers outside its corporate limits, rates may be ten percent (10%) higher than rates inside its corporate limits if, but only if, such rates for service with the ten percent (10%) surcharge are equal to, or less than, rates for service of electric public utilities adjacent to the municipality's service territory.
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