Sec. 6. (a) Before a water utility is authorized to include customer lead service line improvements as eligible infrastructure improvements for purposes of IC 8-1-31, for a public utility, or for purposes of this chapter, for a municipally owned utility, the commission must first approve the water utility’s plan for the replacement of the customer owned portion of the lead service lines within or connected to the water utility’s system. The water utility’s plan must address the following:

(1) The availability of grants or low interest loans and how the water utility plans to use available grants or low interest loans to help the water utility finance or reduce the cost of the customer lead service line improvements for the water utility and the water utility’s customers, including any arrangements for the customer to receive available grants or financing directly.

(2) A description of how the replacement of customer owned lead service lines will be accomplished in conjunction with distribution system infrastructure replacement projects.

(3) The estimated savings in costs per service line that would be realized by the water utility replacing the customer owned portion of the lead service lines versus the anticipated replacement costs if customers were required to replace the customer owned portion of the lead service lines.

(4) The number of lead mains and lead service lines estimated to be part of the water utility’s system.

(5) A range for the number of customer owned lead service lines estimated to be replaced annually.

(6) A range for the total feet of lead mains estimated to be replaced annually.

(7) The water utility’s proposal for addressing the costs of unusual site restoration work necessitated by structures or improvements located above the customer owned portion of the lead service lines.

(8) The water utility’s proposal for:

(A) communicating with the customer the availability of the water utility’s plan to replace the customer owned portion of the lead service line in conjunction with the water utility’s replacement of the utility owned portion of the lead service line; and

(B) documenting the customer’s consent or lack of consent to replace the customer owned portion of the lead service line.

(9) The water utility’s proposal concerning whether the water utility or the customer will be responsible for future replacement or repair of the portion of the new service line corresponding to the previous customer owned lead service line.

(10) The estimated total cost to replace all customer owned portions of the lead service lines within or connected to the water utility’s system and an estimated range for the annual cost to be incurred by the water utility under the water utility’s plan.

     (b) The commission shall approve a water utility’s plan if the commission finds the plan to be reasonable and in the public interest. Subject to subsection (c), in general rate cases following the approval of a public utility’s plan, the commission shall for ratemaking purposes add to the value of the public utility’s property for purposes of IC 8-1-2-6 the actual costs incurred by the public utility in replacing the customer owned portion of the lead service lines and in removing customer owned lead service lines from service in accordance with the public utility’s plan, notwithstanding the continued ownership of the service line by the customer.

     (c) To the extent a water utility incurs an annual cost under the water utility’s plan in excess of the range set forth in subsection (a)(10) and approved by the commission under subsection (b), the additional costs are not eligible for the ratemaking treatment provided for in this section or in section 7 of this chapter.

As added by P.L.91-2017, SEC.8. Amended by P.L.137-2020, SEC.4; P.L.32-2021, SEC.17.