A5343

An Act concerning the replacement of lead service lines and supplementing Title 58 of the Revised Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. The Legislature finds that the presence of lead in drinking water represents a threat to the public health, especially the health and development of New Jersey’s children; that pipes containing lead that connect water mains to homes and other buildings, often called lead service lines, are a primary source of lead in drinking water; and that, due in part to the age of New Jersey’s housing, there does not exist a full and complete inventory of all lead service lines in the State.

The Legislature therefore declares that public water systems should fully inventory all service lines and gradually replace all lead services lines, portions of which may exist on private property; and that, given the risk to public health and the resulting social costs that lead exposure imposes upon society as a whole, it is in the public interest that each public water system be obligated to replace lead service lines, including those that exist on private property, and be authorized to recoup the costs of lead service line replacements from all subscribers of the public water system.

2. As used in this act:

“Board” means the Board of Public Utilities or any successor agency.

“Gooseneck, pigtail, or connector” means the short section of flexible piping, usually one to two feet long, which is used to connect rigid sections of service line piping.

“Investor-owned public water system” means a public water system that is a public utility, as defined in R.S.48:2-13, and which is subject to the jurisdiction of the board pursuant to Title 48 of the Revised Statutes.

“Lead service line” means a service line that is made of, or lined with, materials containing lead. "Lead service line" shall include a lead gooseneck, pigtail, or connector, regardless of the composition of the rigid sections of service line piping to which they are attached. "Lead service line" shall also include a service line composed of galvanized steel.

“Partial replacement” means the act of replacing any service line component without replacing the entire service line.

“Property owner side” means the portion of a service line owned by a property owner.

“Public water system” means a system for the provision to the public of water for human consumption through pipes or other constructed conveyances, if the system has at least 15 service connections or regularly serves an average of at least 25 individuals daily at least 60 days out of the year. "Public water system" shall include: (1) any collection, treatment, storage and distribution facilities under control of the operator of the system and used primarily in connection with the system; and (2) any collection or pre-treatment storage facilities not under control of the operator which are used primarily in connection with the system. "Public water system" shall also include the operator of the system. "Public water system" shall not include transient, non-community systems.

“Public water system side” means the portion of a service line owned by a public water system.

“Service line” means any piping, tubing, and fittings connecting a water main to a building that serves a customer of a public water system. “Service line” shall include the property owner side and the public water system side of a service line.

3. a. Each public water system in the State shall develop a service line inventory in accordance with the requirements of this section, in order to determine the existence or absence of a lead service line at each service connection in its service area. The service line inventory shall include information about service line locations and the composition of service lines at each location. The department may prescribe data management means and methods to provide for the receipt of uniform submissions of the service line inventory by public water systems.

b. No later than 30 days after the effective date of this act, a public water system shall compile and submit to the department an initial count of the number of lead service lines and the number of service lines of unknown composition that are known to be present in the service area of the public water system.

c. No later than six months after the effective date of this act, a public water system shall submit to the department an initial service line inventory. The inventory shall include:

(1) the locations of identified lead service lines;

(2) an indication of whether the identified lead service lines are completely composed of lead or otherwise meet the definition of lead service line;

(3) the locations of service lines suspected to be lead;

(4) for each identified and suspected lead service line, whether the line is owned by the public water system, property owner, or both;

(5) the locations and compositions of non-lead service lines; and

(6) a separate category identifying all service lines of unknown composition.

The public water system shall use historical building records and other available information, including data from the American Water Works Association or other industry research groups, to determine the likelihood of the presence of lead service lines in all portions of its service area.

After the submission of the initial service line inventory, each public water system in the State shall continue the inventory process and utilize every reasonable method available to locate all lead service lines within its service area. This process shall include, but shall not be limited to, visual inspection during planned maintenance, meter replacement, and main replacement projects, and input that the public water system requests from its customers.

d. No later than one year after the effective date of this act, a public water system shall submit to the department an updated inventory of its service territory that meets the requirements of subsection c. of this section. The updated inventory shall also contain the following information:

(1) supporting information detailing the reasoning behind the identification of each service line identified as being suspected of containing lead; and

(2) for each service line identified as being of unknown composition, a description detailing the steps undertaken to determine if the line contains lead.

The public water system shall keep the department informed of its progress pursuant to this subsection and shall continue to adhere to the provisions of section 7 of this act. If a public water system exhausts all other methods of identifying a service line, including the use of new technologies that become available, the department may require excavation as necessary, to identify the service line.

e. Beginning two years after the effective date of this act, a public water system shall annually submit to the department:

(1) an updated service line inventory that meets the requirements of subsections c. and d. of this section; and

(2) a certification that the public water system is in compliance with the provisions of this act.

f. A public water system shall provide its most recent service line inventory, upon request and at no cost, to appropriate State officials or to the local government officials of a municipality served by the public water system. A public water system that serves more than 3,300 customers shall make its most recent service line inventory available on its Internet website.

4. a. No later than 30 days after submitting an initial service line inventory to the department pursuant to subsection c. of section 3 of this act, and periodically thereafter as the department may require, a public water system shall send, to each property owner and customer served by a lead service line or service line of unknown composition, written notice of the composition of the service line. The public water system shall determine if a landlord-tenant relationship exists at the premises being notified. The public water system shall determine the names and addresses of each tenant, in order to provide the notice, by methods that shall include, but not be limited to, mailings to landlords requesting a list of tenants. The utility shall provide copies of the notice to each head of household tenant. The notice shall be sent by certified mail, in a separate mailing from the bill. The notice shall be in a form and manner as determined by the department, and shall include, but not be limited to: information about the sources of lead in drinking water, including lead service lines and household plumbing; the health effects of lead exposure; and steps customers can take to reduce their exposure to lead in drinking water. In the case of a multi-family dwelling, until the lead service line has been replaced or identified as a non-lead service line, the landlord shall post the notice in a conspicuous location in a common area of the dwelling. The landlord shall also inform each new tenant of the existence of the lead service line or service line of unknown composition and provide each new tenant with a copy of the notice.

b. If a public water system serves a municipality in which the primary language of 10 percent or more of the residents is a language other than English, the public water system shall provide the notice required pursuant to subsection a. of this section in both English and the other language to the applicable property owners and customers in that municipality.

5. a. No later than 12 months after the effective date of this act, each public water system shall submit to the department an initial plan for replacing all lead service lines within its service area. The plan shall be updated annually and made consistent with the annual updates to the public water system’s service line inventory required pursuant to section 3 of this act, until all lead services lines within the public water system's service area have been replaced.

b. Each lead service line replacement plan and annual update thereto shall provide for the annual replacement of at least seven percent of all lead service lines identified by the public water system on the date it submits its initial plan to the department. In addition, each plan and update thereto shall provide for the replacement of all lead service lines within the service area of the public water system no later than 20 years after the effective date of this act, regardless of whether the lines are known or unknown on the date the public water system submits its initial plan to the department. The department may require additional information, as it deems appropriate, to be included in each lead service line replacement plan and annual update thereto.

c. A public water system shall not, except during emergencies such as a water main or service line break, conduct a partial replacement of a lead service line, and the public water system shall make a good faith effort to replace the entire lead service line. A partial replacement of a lead service line shall not count toward the public water system's replacement requirements pursuant to subsection b. of this section.

d. A public water system may apply for, and the department may approve, a reasonable extension of any target or deadline set forth in this section, provided that the public water system demonstrates to the department that the extension is necessary to meet a service reliability demand or public health need, not related to lead abatement, within the system.

e. In the event of fiscal distress, a municipally owned public water system may apply for and the department, in consultation with Division of Local Government Services in the Department of Community Affairs, may approve a reasonable extension of any target or deadline set forth in this section.

6. a. An investor-owned public water system may recoup the costs of lead service line replacements from its customers, subject to the provisions of this section. A proposal to recoup the costs of lead service line replacements shall be considered in the context of the investor-owned public water system’s next general rate case proceeding, initiated after the effective date of this act, during which the board shall consider the rate impacts of the proposed lead service line replacement plan prior to approving the proposal. In order to recoup the costs of lead service line replacements from its customers, an investor-owned public water system shall submit the proposal within a petition to the board that addresses the following:

(1) the estimated total cost to replace both the property owner sides and public water system sides of all lead service lines within, or connected to, the investor-owned public water system's service area and an estimated range for the annual cost to be incurred by the system under the system's current lead service line replacement plan;

(2) a quantification of the shareholder contribution to be made in order to meet the requirements of this act;

(3) the availability of grants or low interest loans and whether the investor-owned public water system plans to use available grants or low interest loans to help the system finance or reduce lead service line replacement costs, including a detailed description of any efforts made by the system to secure such financing;

(4) the investor-owned public water system’s proposed rate treatment of the replacement costs, including:

(a) any proposed deferred accounting treatment of the costs;

(b) the proposed rate base treatment of the costs;

(d) the average monthly residential bill impact of the proposed rate treatment of the costs;

(5) a description of how the replacement of lead service lines will be accomplished in conjunction with other replacement projects in the investor-owned public water system's service area;

(6) the estimated savings per lead service line achieved by the investor-owned public water system replacing property owner sides of lead service lines instead of the property owner; and

(7) the investor-owned public water system's proposal for:

(a) communicating the system's plan to replace a lead service line to a property owner and customer; and

(b) documenting a property owner's or customer's consent or lack of consent to the replacement of a lead service line.

b. Before an investor-owned public water system may recoup the costs of lead service line replacements from its customers pursuant to subsection a. of this section, the board shall ensure that the department has approved the investor-owned public water system's plan for the replacement of the lead service lines required pursuant to section 5 of this act.

7. No later than December 31 of each year, a public water system shall submit to the department, in a form and manner to be determined by the department, a report detailing the public water system’s progress in replacing lead service lines pursuant to this act. A public water system that serves more than 3,300 customers shall make its report available on its Internet website. If the department determines, based on the information provided by the public water system, that the public water system has completed the replacement of all lead service lines within the public water system’s service area, the public water system shall no longer be required to submit a report pursuant to this section.

8. a. The Department of Environmental Protection may adopt, pursuant to the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), any rules and regulations necessary to implement the provisions of this act.

b. The Board of Public Utilities may adopt, pursuant to the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), any rules and regulations necessary to implement the provisions of this act.

9. This act shall take effect immediately.

STATEMENT

This bill would require each public water system (PWS) in the State to develop a service line inventory and a replacement plan for lead service lines that provides for the replacement of all lead service lines within 20 years, and would authorize an investor-owned PWS to recoup the costs of lead service line replacements by increasing the rates it charges to its customers.

Specifically, the bill would require each PWS to submit an initial count of its lead service lines, and service lines of unknown composition to the Department of Environmental Protection (DEP) no later than 30 days after the bill’s enactment. The bill would then require each PWS to submit an initial service line inventory to the DEP no later than six months after the bill’s enactment. One year after the date of enactment, the bill would require PWSs to submit a more detailed service line inventory. Beginning two years after the bill’s enactment, the bill would require PWSs to develop and submit to the DEP an updated service line inventory and a certification that the PWS is in compliance with the provisions of the bill. The bill would authorize the DEP to direct PWSs to excavate service lines, when necessary, to determine whether or not they contain lead.

The bill would require a PWS, no later than 30 days after submitting its initial service line inventory to the DEP, to send written notice to each property owner and customer served by a lead service line or service line of unknown composition. The bill would also require landlords of multi-family dwellings that receive this notice to post it in the dwelling and to inform new tenants of the composition of the service line.

No later than 12 months after the bill’s enactment, the bill would require each PWS to submit to the DEP an initial plan for replacing all lead service lines within its service area. The plan would be required to provide for the annual replacement of at least seven percent of all lead service lines known to the PWS on the date it submits its initial plan to the DEP, and the replacement of all lead service lines within the PWS’s service area no later than 20 years after the bill’s enactment. The bill would require each PWS to update its replacement plan annually and make it consistent with the PWS’s updated service line inventory.

The bill would authorize investor-owned PWSs to recoup the costs of lead service line replacements by including a proposal for recoupment to the Board of Public Utilities (BPU) in a general rate case proceeding. The BPU would be required to consider the costs to customers before approving the proposal. The investor-owned PWS would be required to submit a petition to the BPU at its next general rate case proceeding, which contains certain specific information about the PWS's methods and costs, as enumerated in section 6 of the bill.

The bill would require each PWS to submit a report to the DEP detailing the PWS’s progress in replacing lead service lines in accordance with the provisions of the bill. A PWS that serves more than 3,300 customers would be required to make its report available on its Internet website. Finally, the bill would authorize the DEP and the BPU to adopt rules and regulations to implement the bill’s provisions.