Sec. 7. If the commission approves the project, the commission shall, at the request of the health agency, direct the local public utility to undertake and complete the project. The commission shall enter such an order only if both of the following apply:

(1) The commission’s order authorizes an increase in the local public utility’s water rates in an amount sufficient to cover the local public utility’s depreciation expense related to its investment in the project and provide the local public utility an after-tax return on the undepreciated portion of the project at a rate not less than the rate of return allowed the local public utility on its rate base in its most recent general rate order as:

(A) set out in the order; or

(B) stipulated by the local public utility and the office of the utility consumer counselor.

(2) The rate adjustment associated with the project will not increase the local public utility’s rates by more than one percent (1%).

As added by P.L.94-2000, SEC.2.