This bill establishes new procedures for enhancing infrastructure related to water and wastewater utilities in Iowa, allowing for the development of alternative ratemaking mechanisms to recover costs associated with certain investments. It emphasizes the importance of maintaining adequate and resilient water and wastewater treatment facilities, stating that the commission is not bound by traditional ratemaking principles when evaluating system enhancement infrastructure. Key definitions are provided, including "system enhancement costs," which encompass depreciation, operation and maintenance expenses, and pretax returns, while excluding fines and penalties. The bill also outlines what constitutes "system enhancement improvements," such as replacing aging infrastructure and installing new systems to comply with health and safety regulations.

Before an eligible utility can recover system enhancement costs through a system enhancement charge, it must obtain approval from the commission for a detailed plan. The bill mandates that the commission dismiss any application if the utility has not received a final order in a general rate case for the same type of service within the last five years. The application process is defined as a contested case, requiring the commission to issue a final order within six months. The bill allows utilities to submit separate plans for water and wastewater services and permits annual applications to adjust system enhancement charges based on specific criteria. Additionally, it allows for the deferral of costs incurred prior to plan approval and exempts petitions from publication notice requirements, ensuring a streamlined process for utilities to enhance their infrastructure.