(1) A water company must not refuse or discontinue service to an applicant or customer when there are unpaid bills from a prior customer at the same premises unless the company believes, based on objective evidence, that the applicant is acting on behalf of the prior customer with the intent to avoid payment.

(2) A water company cannot permanently deny service to an applicant or customer because of a prior obligation to the company. A prior obligation is the dollar amount that has been billed to a customer but left unpaid at the time of disconnection of service for nonpayment.

(3) The water company may refuse to connect an applicant for service, or refuse to increase service to a customer, when one or more of the following conditions exist:

(a) The service will adversely affect service being provided to other customers;

(b) The applicant or customer has not complied with state, county, or municipal codes or regulations concerning the approved design or use of the facilities;

(c) In the company's judgment, the applicant's or customer's installation of piping or equipment is hazardous, or of such design that satisfactory service cannot be provided;

(d) The applicant or customer has not installed on its premises required protective devices necessary to protect the company's property or that of its other customers;

(e) The company is unable to secure all necessary rights of way, easements, approvals, and permits;

(f) Furnishing the water is contrary to the provisions of the company's approved water system plan; or

(g) The location to be served is located outside of the company's service area.