Indiana American Water recently became the first utility to seek approval, under a state law enacted last year, of its plan to replace lead drinking water lines, including portions owned by customers.
Records indicate 50,748 lead service lines might be present within the company’s system, nearly 65 percent of which are in Northwest Indiana. The majority of those lines are in Gary, Indiana American spokesman Joseph Loughmiller said.
Indiana American Water treats its water to prevent corrosion of lead pipes and plumbing equipment, and records show the company is in compliance with the U.S. Environmental Protection Agency’s Lead and Copper Rule.
However, the EPA rule is widely viewed as inadequate to protect public health, and experts caution the best way to eliminate the risk of lead in drinking water is to remove aging pipes and other plumbing equipment that can leach lead.
Indiana American Water’s Northwest Indiana District provides water service to Gary, Hobart, Merrillville, Chesterton, Burns Harbor, Portage, Porter, South Haven, Winfield, Shorewood Forest and White Oaks, a conservancy district in Porter County.
The company also supplies water to Schererville, Crown Point, New Chicago and Ogden Dunes through wholesale contracts. In these communities, the local water system is responsible for infrastructure upgrades.
Throughout the first part of the 1900s, water utilities commonly used lead pipes and lead solder in their systems. The metal was banned from use in drinking water systems in June 1986, but use continued of brass and chrome-plated fixtures that can leach lead.
EPA says no amount of lead in water is safe.
Under its proposed plan, Indiana American would replace customer-owned lead lines with permission of property owners. After replacement, customers would retain financial responsibility for the equipment.
The company estimated the average cost per customer would be about $3,500. If homeowners managed their own projects, the cost could be as much $4,000 to $5,500 each, according to the company.
The project's estimated total cost statewide could be between $5.25 million and $17.5 million through 2022, depending on the number of service lines replaced, records show.
“No rate increases are being requested at this time as a result of lead service line replacements,” Loughmiller said. “Indiana American Water will attempt to minimize any future related rate increases through the use of grants or special-term loans.”
However, if the Indiana Utility Regulatory Commission approves Indiana American’s lead line replacement plan, the utility would be able to go back before the commission to recover its costs outside of a standard rate case.
“All ratepayers would be affected by any rate increase relative to customer lead service line replacement,” Loughmiller said.
'Funding is a big issue'
Indiana American's lead line replacement plan is the first to be proposed under a new state law, which passed the General Assembly as House Enrolled Act 1519.
State Sen. Ed Charbonneau, R-Valparaiso, said he was pleased to see Indiana American introduce its lead line replacement plan. Charbonneau co-sponsored the bill along with Sen. Lonnie Randolph, D-East Chicago, and other lawmakers.
Charbonneau has been working to address water infrastructure challenges for more than six years. In the beginning, the issue didn't get much attention, he said.
“We weren’t ignoring it as a state,” he said. “We weren’t paying enough attention to it to ignore it. It was there, everybody assumed that it was OK, and that’s not the case.”
Indiana American’s proposal shows lawmakers' efforts have begun to bear fruit, he said.
The Indiana Finance Authority issued a report in December 2016 that found the state's aging water infrastructure needs $2.3 billion in immediate repairs and $815 million a year in additional maintenance spending to protect human health.
Water utilities often don’t own the section of pipe from the street to the home, which leaves homeowners on the hook for the cost of replacement. House Bill 1519 allowed utilities like Indiana American to address that problem, he said.
"Funding is a big issue," Charbonneau said. "We spent a lot of time on the roads and have a plan in place now for road funding. I'm not so sure our water infrastructure problem isn't bigger."
Drinking water can be a sensitive issue, so lawmakers knew they needed to proceed carefully and base their decisions on reliable data, Charbonneau said.
“It’s been a very methodical, measured approach,” he said. “Each step we’ve taken has been based on valid data.”
Charbonneau said he's proud that each piece of legislation stemming from the effort has passed the House and Senate with overwhelming support.
If the IURC also approves Indiana American's plan to purchase the Lake Station water system, any lead lines in that community would be addressed under the proposed plan, Loughmiller said.
The IURC has granted petitions by Schererville and the Indianapolis-based nonprofit Citizens Action Coalition of Indiana to intervene in the case, according to records and an IURC spokeswoman.
Attorneys for Schererville wrote in the petition the town’s position may be opposite Indiana American on various issues.
Work to be prioritized
Indiana American plans to prioritize lead line replacement in conjunction with projects to replace and relocate water mains. The company has a GIS-based model that prioritizes needs by identifying pipe-failure risks.
Customers who have lead lines but draw water from mains that are not at the end of their useful life will be scheduled for replacement “at the time most efficient for allocation of resources, minimization of mobilization costs, and with consideration of community disturbance,” records state.
Customers will not be permitted to make individual requests to have their lines replaced.
The company will offer to flush each property’s water lines after work is complete and sample water to ensure lead levels are below EPA’s action level.
The company estimated it will complete all work by 2041. That time frame could vary greatly, depending on the availability of contractors, lower interest or no-interest financing, additional capital investments and more, records say.
Indiana American plans to disconnect any lead service lines it finds have been inactive for more than two years.
If the IURC approves a requested change in the company’s rules and regulations, customers at disconnected properties would be responsible for replacing the customer-owned portion of the lead line before reconnection occurs.
If the change is not approved, Indiana American would complete reconnections at these properties after the customer signs an agreement acknowledging the presence of a lead line.
The Indiana Office of Utility Consumer Counselor, which represents ratepayer interests, intends to review the plan and file testimony with the IURC, a spokesman said.
"The OUCC will use our legal and technical resources to review the plan, focusing on whether the plan complies with the statute and whether it entails a reasonable, cost-based approach," spokesman Anthony Swinger said.