The bill amends current law regarding the acquisition of water, sanitary sewer, and storm water utilities by public utilities in Iowa. It removes the previous stipulation that acquisitions with a purchase price of $3 million or more require approval from the Iowa Utilities Commission (commission) and adds a requirement for the commission to find that the acquisition will not negatively impact ratepayers of either the acquiring or acquired utility. Additionally, the bill mandates that the commission must specify ratemaking principles prior to approving the acquisition, eliminating the possibility of deferring these principles to a later contested case proceeding.

Furthermore, the bill changes the method for determining applicable ratemaking principles by replacing the fair market value option with the net book value of the acquired utility, as established in the contested case proceeding. It also introduces a provision that prohibits the consolidation of rates for the two utilities for at least ten years if the acquisition would increase the average rate base per customer for existing customers of the acquiring utility. Overall, these changes aim to enhance regulatory oversight and protect ratepayers during utility acquisitions.