(1) A natural gas public utility shall not be subject to the jurisdiction of the commission or the requirements of the State Natural Gas Regulation Act if (a) it distributes, sells, or transports natural gas or provides natural gas services to persons receiving services through fewer than seven thousand five hundred meters in the state, (b) it has entered into an agreement with a city in which it distributes, sells, or transports natural gas or provides natural gas services that establishes the terms and conditions of the service and the rates to be paid and such agreement is authorized by an ordinance in effect at the time of the distribution, sale, or transportation of natural gas or provision of natural gas services, and (c) the terms and conditions of such agreement are applicable to customers, if any, served by the natural gas public utility outside the jurisdiction of the city.

(2) Any ratepayer or city served by a natural gas public utility pursuant to subsection (1) of this section, the commission, the public advocate, or the natural gas public utility providing service pursuant to subsection (1) of this section may pursue an action in the district court of the county in which such utility operates for a determination as to whether or not such utility is subject to the jurisdiction of the commission and the requirements of the act by reason of the failure to meet one or more of the qualifying factors set out in subsection (1) of this section.