Insight

Indiana on Cutting Edge of Lead Service Line Replacement for Water Utilities

As utilities have undertaken the task of replacing the mains, which the utility owns and to which the customer service line connects, an increased risk from lead in that customer line is exposed.

Lead Service Line Replacement
Nicholas K. Kile

Nicholas K. Kile

October 10, 2017 10:34 AM

The tragedy in the City of Flint has resulted in considerable introspection concerning the risks of lead in our drinking water. One particularly difficult hurdle is lead service lines. The portion of the service line between the meter and the house is generally owned by the customer. Historically, the utility has not had the right to go onto the customer’s property to replace that line, let alone recover its costs should it wish to do so.

And as utilities have undertaken the task of replacing the mains, which the utility owns and to which the customer service line connects, an increased risk from lead in that customer line is exposed—the disturbance caused from the replacement of the utility’s mains increases the risk that the customer line will release its lead into the water as it passes.

For 25 years, the U.S. Environmental Protection Agency (EPA), through its Lead and Copper Rule, has been urging the replacement of lead service lines to minimize the health risks from exposure to lead in drinking water. Until recently, the federal government has provided no funds to address a major impediment to this objective: how will utilities help customers pay for replacing portions of service lines that are owned by the customer? The Water Infrastructure Improvements for the Nation Act, passed by Congress and signed into law late last year, began to address this funding gap by providing grant funding for low-income customers through the Drinking Water State Revolving Fund (DWSRF).

In 2017, Indiana has placed itself at the cutting-edge of facilitating lead service line replacement and is supplementing the federal program. On April 26, the Indiana Utility Regulatory Commission (IURC) issued an order in City of East Chicago, Cause No. 44826, approving a program whereby the Indiana Finance Authority (IFA) will provide low-interest loans to help East Chicago replace all lead service lines in its system. The IFA lowered the interest rate and increased the principal by $3.1 million to provide enough funds for East Chicago to replace the customer service lines without increasing annual debt service payments. The commission explained, “While … it is clear that all ratepayers will be paying … on the proposed $18 million in financing, which includes funding for replacement of customer-owned lines … it would be short-sighted for this Commission to ignore the potential benefits of replacing customer-owned lead infrastructure.” The takeaway from the case for other communities is that the Indiana Finance Authority has funds available for lead service line replacement programs and is willing to enter into innovative financial transactions to help communities address this problem.

At the same time the IURC was considering East Chicago, the Indiana General Assembly was enacting House Enrolled Act 1519, which was signed by Governor Holcomb on April 20. This law allows regulated water utilities to propose programs whereby the utility’s investment in replacing the customer-owned portion of lead service lines will be included in the utility rate base upon which it is authorized to earn a return. The new law requires a plan to be filed with the IURC that sets forth, among other things: (1) how the service line replacement will be completed in conjunction with ongoing infrastructure replacement; (2) the anticipated savings from replacing the customer-owned line simultaneously with the replacement of the utility’s mains; and (3) the utility’s proposed method for communicating with customers the availability of the program and for documenting their consent or lack of consent to participate.

In these two moves, Indiana is now at the head of the pack in addressing lead service line replacement and could be creating a model for other states to follow.

-------------------------

Nicholas Kile is a partner in Barnes & Thornburg, LLP and is co-chair of the firm’s energy, telecommunications, and utilities practice group. He is a past recipient of Best Lawyers® “Lawyer of the Year” for energy law and has practiced regularly before the Indiana Utility Regulatory Commission for more than 25 years.

Related Articles

Water Futures


by John Ettorre

By themselves, desalination, conservation, and system re-engineering won't solve our water puzzle. But together, they just might work.

Water Futures

Government of the People


by Allyn Stern

A baker’s dozen tips for working with the Environmental Protection Agency

Tips for Working With the EPA

Trending Articles

The Best Lawyers in South Africa™ 2023


by Best Lawyers

Best Lawyers proudly announces lawyers recognized in South Africa for 2023.

South African flag

Announcing the 2023 The Best Lawyers in America Honorees


by Best Lawyers

Only the top 5.3% of all practicing lawyers in the U.S. were selected by their peers for inclusion in the 29th edition of The Best Lawyers in America®.

Gold strings and dots connecting to form US map

Best Lawyers Voting Is Now Open


by Best Lawyers

Voting has begun in several countries across the globe, including the United States, the United Kingdom and Europe. Below we offer dates, details and answers to voting-related questions to assist with the voting process.

Hands holding smartphone with five stars above phone

Best Lawyers: Ones to Watch in America for 2023


by Best Lawyers

The third edition of Best Lawyers: Ones to Watch in America™ highlights the legal talent of lawyers who have been in practice less than 10 years.

Three arrows made of lines and dots on blue background

Announcing The Best Lawyers in Australia™ 2023


by Best Lawyers

The results include an elite field of top lawyers and firms from Australia.

The Best Lawyers in Australia™ 2023

Announcing the 2023 The Best Lawyers in Canada Honorees


by Best Lawyers

The Best Lawyers in Canada™ is entering its 17th edition for 2023. We highlight the elite lawyers awarded this year.

Red map of Canada with white lines and dots

Famous Songs Unprotected by Copyright Could Mean Royalties for Some


by Michael B. Fein

A guide to navigating copyright claims on famous songs.

Can I Sing "Happy Birthday" in Public?

Could Reign Supreme End with the Queen?


by Sara Collin

Canada is revisiting the notion of abolishing the monarchy after Queen Elizabeth II’s passing, but many Canadians and lawmakers are questioning if Canada could, should and would follow through.

Teacup on saucer over image of Queen's eye

Rising Transfer Taxes


by Angus C. Beverly

Transfer taxes in California are becoming a statewide trend with potentially national implications. Here is a breakdown of the effects in several cities.

State of California in orange with city in backdrop

What the Courts Say About Recording in the Classroom


by Christina Henagen Peer and Peter Zawadski

Students and parents are increasingly asking to use audio devices to record what's being said in the classroom. But is it legal? A recent ruling offer gives the answer to a question confusing parents and administrators alike.

Is It Legal for Students to Record Teachers?

The Upcycle Conundrum


by Karen Kreider Gaunt

Laudable or litigious? What you need to know about potential copyright and trademark infringement when repurposing products.

Repurposed Products and Copyright Infringemen

Caffeine Overload and DUI Tests


by Daniel Taylor

While it might come as a surprise, the over-consumption of caffeine could trigger a false positive on a breathalyzer test.

Can Caffeine Cause You to Fail DUI Test?

Wage and Overtime Laws for Truck Drivers


by Greg Mansell

For truck drivers nationwide, underpayment and overtime violations are just the beginning of a long list of problems. Below we explore the wages you are entitled to but may not be receiving.

Truck Driver Wage and Overtime Laws in the US

Best Law Firms® Research Has Begun


by Best Lawyers

Best Law Firms® rankings are annually produced awards recognizing the top law firms across the United States. We are here to offer insight into the submission process for all eligible firms.

Black background with colorful squares and faces

Choosing a Title Company: What a Seller Should Expect


by Roy D. Oppenheim

When it comes to choosing a title company, how much power exactly does a seller have?

Choosing the Title Company As Seller

Thirteen Years of Excellence


by Best Lawyers

For the 13th consecutive year, “Best Law Firms” has awarded the most elite and talented law firms across the country through a thorough and trusted data review process.

Red, white and blue pipes and writing on black background