2. Contingency reserve fund maximum. The maximum amount that may be accumulated in a contingency reserve fund is as follows:

A. For utilities with annual revenues of up to $125,000, the maximum amount is 25% of the most recent year's annual revenues;

B. For utilities with annual revenues between $125,001 and $250,000, the maximum amount is 15% of the most recent year's annual revenues plus $12,500;

C. For utilities with annual revenues between $250,001 and $375,000, the maximum amount is 5% of the most recent year's annual revenues plus $37,500; and

D. For utilities with annual revenues in excess of $375,000, the maximum amount is 15% of the most recent year's annual revenues.

Any contingency allowance collected when the contingency reserve fund is at the maximum amount permitted must be credited to the unappropriated retained earnings account and treated in the same manner as any other surplus produced by a consumer-owned utility.

3. Use of contingency reserve fund. The contingency reserve fund may be used only to pay for operating losses resulting from insufficient revenues to meet operating expenses and debt service costs, including, but not limited to, principal and interest repayment.

3-A.__Authorized uses; commission review.__This section does not:

A.__Authorize a consumer-owned water utility to expend amounts collected pursuant to this section for any purposes other than those allowed under this Title; or

B.__Exempt any expenditures from review by the commission in accordance with this Title.

4. Transition. Any contingency reserve fund accumulated and expended prior to January 1, 1991 may not be considered in determining whether a utility has reached its maximum amount under subsection 2.