On October 3, the Public Utility Commission adopted a Joint Petition for Settlement on Remand with PA American Water Company approving the Company’s plan to replace customer-owned lead service pipes (LSPs) and recover associated costs-- the first such plan granted by the PUC under Pennsylvania’s new Act 120 of 2018 (Act 120).

The Commission voted 4-0 to adopt the Recommended Decision of PUC Administrative Law Judge Elizabeth Barnes approving PAWC’s two-part replacement plan-- seen as a cost-effective way to replace LSPs in conjunction with the Company’s main and Company-owned LSP replacement program while avoiding health and safety concerns associated with partial lead service line replacements.

PAWC’s LSP replacement plan includes elements such as:

-- Following PAWC’s replacement of a customer-owned LSP, the customer will retain ownership and responsibility for the new water service line.

-- If the customer does not agree to an LSP replacement, PAWC will replace the Company-owned portion of the LSP.

-- PAWC will provide certain types of assistance to qualified low-income customers during the implementation of the LSP replacement program.

-- PAWC will provide a two-year warranty on workmanship and materials for customer-owned LSPs that it will replace.

-- PAWC will reimburse customers who recently replaced their LSPs.  Certain conditions and verification requirements apply for these reimbursements.

-- PAWC will engage in appropriate customer outreach on its LSP replacement program.

-- The effect on PAWC’s customer bills is expected to be less that $0.10 per month.

PAWC provides water and wastewater services to more than 655,000 customers-- along with only wastewater service to approximately 54,000 customers-- in portions of 36 counties.

In a similar case prior to Act 120, the Commission previously granted York Water Company’s request to expedite replacement of both company-owned and customer-owned lead service lines, with the total line replacement done at the same time and solely at the company’s cost.

Along with approving PAWC’s LSP replacement plan, the Commission also adopted a joint motion of Chairman Gladys Brown Dutrieuille and Commissioner John F. Coleman, Jr. directing PUC staff to convene a working group to gather information and stakeholder input on how the Commission may develop uniform procedures, consistent with Act 120, to address LSPs and damaged wastewater lateral replacement issues facing the state’s regulated utilities.

“Integrating lead service line and damaged wastewater lateral replacement programs into a uniform regulatory approach, thus enhancing regulatory clarity, will better serve affected customers, utilities, and the Commission,” said PUC Chairman Gladys Brown Dutrieuille and Commission John F. Coleman in their joint motion-- which directs PUC staff to convene a working group to gather information and stakeholder input for lead line replacement programs under Act 120.

In October 2018, Gov. Tom Wolf signed into law Act 120, which amended the Public Utility Code regarding the accelerated replacement of LSPs and damaged wastewater laterals.  This new provision establishes a uniform standard under which utilities may seek to replace LSPs and damaged wastewater laterals and recover costs associated with that replacement. 

Act 120 also directs the PUC to establish standards to ensure a warranty on the utility’s replacement work and reimburse customers who replaced lead service lines at their own cost.

Per today’s motion, the Commission’s Bureau of Technical Utility Services and Law Bureau will lead the working group--  to include key stakeholders from among the state’s water utilities, industry leaders, state agencies, advocates, the PUC’s independent Bureau of Investigation and Enforcement, and other interested parties.

After completion of the working group process, staff will submit a written report to Commissioners by March 31, 2020, with recommendations for additional parameters for LSPs – including options for implementation.

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