No proposal for a development using water supplied by a company incorporated on or after October 1, 1984, shall be approved by a planning commission or combined planning and zoning commission unless such company has been issued a certificate pursuant to section 16-262m. The municipality in which the planning commission or combined planning and zoning commission is located shall be responsible for the operation of any water company created without a certificate after October 1, 1984, except a water company supplying more than two hundred fifty service connections or one thousand persons created without a certificate between October 1, 1984, and September 30, 1998, if the water company at any time is unable or unwilling to provide adequate service to its consumers.