Ensuring Communities Have Access to 

Needed Funding
  • The Need
  • Federal     
  • State                      
  • Local                   
  • Opportunities
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Replacing lead service lines (LSLs) costs money. With 6 to 10 million LSLs to replace, cost estimates range from 16 to 80 billion  dollars  and likely will be borne by the water utility and the community.

​Through their basic water bills, customers typically fund the costs of developing an inventory of LSLs, designing a replacement initiative, and communicating to consumers. They are also typically responsible for the costs of replacing the utility-owned portion of the LSL. However, state and local policies may restrict use of ratepayer funds to replace LSLs on private property, because it is perceived as benefitting the property owners and not the ratepayers.  
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If individual property owners are expected to bear the entire cost of replacing an LSL on their property, the process will likely be slower than if funded by ratepayers or other funding sources.  Property owners have to concur with the need, secure the funding, and make the necessary arrangements. Additionally, some property owners, especially those with low property values or low incomes, may be unable or unwilling to participate, despite the risk posed by lead. As a result, without financial assistance, low-income customers and renters may have greater exposure to lead from LSLs than those who are able to pay. This situation raises environmental justice concerns. As a policy matter, programs encouraging removal of LSLs as a public health measure, need to consider providing adequate funding or assistance and prioritization to ensure the benefits of the initiative apply to all consumers.
  
Beyond LSLs, it is important to realize that our nation’s drinking water infrastructure is chronically underfunded. Discretionary funding is in short supply and there are many important problems facing small and rural communities. Utilities themselves have many competing priorities. EPA’s most recent Drinking Water Infrastructure Needs Survey, published in 2018, identified a total of $473 billion in capital improvement needs from over the next 20 years (2015 through 2034). This need is substantially greater than the $32 billion provided by the Drinking Water State Revolving Fund (DWSRF) since its inception in 1997. In the next quadrennial survey, due in 2023, Congress directed EPA to provide a specific estimate of the cost to replace all LSLs including the portion on private property.
 
State drinking water programs, to which EPA has delegated authority to regulate public water systems under the Safe Drinking Water Act (SDWA), are also underfunded. The December 2013 Association of State Drinking Water Administrators (ASDWA) report estimated annual costs of the projected national minimum base and comprehensive programs are approximately $625 million and $748 million, respectively. However, ASDWA reported that funding levels (from all sources, federal and state) are $385 million for the minimum base program and $440 million for the comprehensive program. ASDWA’s 2018 update to the report found that funding has remained flat for these programs and inflation has increased state costs by 20% -- compounding existing funding gaps noted in the 2013 report. 
  • In February 2020, EPA offered almost $40 million in grants to reduce lead exposure in drinking water. The grants programs was created by the Water Infrastructure Improvements (WIIN) Act. Applications were due June 1, 2020. The agency expected to award one to three grants.
  • In April 2018, EPA made reducing lead in drinking water one of its two priorities in its 2018 offering of funding for its Water Infrastructure Finance Innovation Act (WIFIA) program.  It highlighted LSL replacement as one type of project that would get extra credit in the competitive program that leverages up to $55 million in federal funding.  Several utilities took advantage of the opportunity, including Missouri American Water.
  • In October 2018, Congress enacted the America Water Infrastructure Act of 2018. One provision of the law directed EPA to assess the cost of replacing all LSLs in public water systems in the Unites States in its next quadrennial review that is due in 2023. The assessment must include separate estimates for replacement costs of the portion owned by the public water system and the remaining portion, to the extent practicable. These estimates will enable policy makers with useful context on the funding needs for the DWSRF.
  • In May 2020, Minnesota Governor Tim Walz signed legislation that allows the Minnesota Department of Health and the Public Facilities Authority to modify the existing Drinking Water Revolving Fund Program to allow for principal forgiveness grants for LSL replacement on private property (See SF 13, section 14).​
  • In October 2019, New Jersey’s Governor announced a new statewide plan to reduce lead exposure from main sources with a goal of fully replacing LSLs in 10 years. Key aspects of the plan included: proposing a $500 million bond and enabling utilities to use rates to support LSL replacement.​
  • In July 2019, New York’s Governor announced a second round of funding for the Department of Health’s LSL replacement grant program – 18 communities were awarded a combined $10 million as part of the state’s Clean Water Infrastructure Act. 
  • In October 2018, Pennsylvania enacted P.L. 2018-120 (HB-2075) to establish a framework for investor-owned utilities to recoup the costs of replacing LSLs on private property from rates paid by all customers.
  • In August 2018, the Michigan DEQ provided $9.5 million in grants to 18 communities to update materials inventories and asset management plans and for development of full LSL replacement projects. The department intends to evaluate projects conducted by the grantees for the pilot to determine future recommendations for community LSL replacement.
  • In August 2018, New Jersey's Governor signed legislation authorizing municipalities to replace lead contaminated service connections (including LSLs) on private property if the work is: 1) an environmental infrastructure project; and 2) funded by loans from either the NJDEP or the NJEIT. 
  • In July 2018, the Indiana Finance Authority, which manages the State's Drinking Water State Revolving Loan Fund (SRF), launched a "Lead Line Replacement Incentive" to support full replacement of LSLs and galvanized pipe service lines. Eligible communities receive improved ranking on the priority list and interest rates as low as 0% for the replacement projects.
  • In July 2018, the Massachusetts Clean Water Trust, in coordination with the state Department of Environmental Protection, announced the Incentivized Lead Service Line Replacement Program. Through the program, communities on the 2019 Drinking Water Intended Use Plan for LSL or water main replacement projects can replace LSLs on private property at no extra cost to the community or homeowner. The program reduces the interest rate to as low as zero percent.
  • In June 2018, Michigan filed rules overhauling the state’s Lead and Copper Rule to accelerate LSL replacement. The rules require Community Water Systems to pay for replacement of the entire LSL unless it can show it has no control of the service line. 
  • In May 2018, Missouri’s Public Service Commission determined the Missouri American Water Company (MAWC) could continue its LSL Replacement program funded by rates paid by customers to fully replace LSLs on private property.
  • ​In February 2018, Wisconsin Governor Scott Walker signed legislation that allows municipalities and water utilities to provide financial assistance to property owners to replace LSLs on private property. The law enables a utility or municipality to seek approval from the state PSC to provide customers with financial assistance if certain conditions are met. Read more on this case example from Wisconsin. 
  • In 2017, the Pennsylvania Public Utility Commission approved a proposal from the York Water System to use rates paid by customers to fund full LSL replacement. The utility had exceeded the lead action level and was required by the LCR to replace LSLs. The Commission allowed rates to fund replacement on private property because it was in the public interest to avoid both the public health threat posed by partial replacements and the haphazard approach of relying on property owners to replace their portion. 
  • In 2017, the Vermont Department of Environmental Conservation used state revolving loan funds to establish a $125,000 grant program to address LSLs. The agency would provide individual grants ranging from $20,000 to $80,000 to aid utilities to:
    • Find, map, and inventory lead or lead-containing water distribution and customer service lines;
    • Educate the public about the risks of exposure to lead in drinking water and how to reduce risks;
    • Develop LSL inventories; and
    • Develop a plan to replace lead lines on private and public property. 
  • In 2017, the Virginia Department of Health used state funds to establish an LSL Replacement Rebate Program for full removal of LSLs. Under the program, the utility rebates property owners or authorized third parties the cost of replacing the LSL (or galvanized pipe) on the property owner’s side of the meter. The program is limited to $5,000 per service line and may include up to $500 as an administrative fee. The utility can participate for one year with an option for a one-year renewal under the program. Residences, apartments, daycares, private schools, and other facilities where sensitive populations may be present are eligible for replacement. 
  • In 2017, the Indiana General Assembly enacted HEA-1519, allowing the Indiana Utility Regulatory Commission (IURC) to approve an investor-owned utility’s request to fold the cost of customer-owned LSL replacement into the rates paid by customers. To qualify, a utility must submit a plan addressing 10 elements and demonstrate the proposal is reasonable and in the public’s interest. In July 2018, the IURC approved a proposal from Indiana American Water to replace 50,000 LSLs on private property using rate funds paid by customers.
  • In 2017, through the state budget for fiscal year 2017-2018, Governor Andrew Cuomo and the New York State Legislature created an LSL replacement grant program and allocated $20 million to support it. The New York State Department of Health is developing the program and is required to allocate the funds equitably among the regions of the state and within a region by 1) prioritizing municipalities with a high percentage of elevated blood lead levels, and 2) considering whether the community is low income and the number of LSLs in need of replacement.
  • In 2017, New Jersey Department of Environmental Protection (DEP) and Environmental Infrastructure Trust used state revolving loan funds to establish a $30 million Lead Service Line Replacement funding package for State Fiscal Year 2018 and 2019. Eligible applicant projects can receive up to $1,000,000 per year, 90% in principal forgiveness and 10% DEP interest-free loans. ​
  • In October 2017, Pennsylvania enacted P.L. 2017-44, which included a provision giving municipalities the authority to replace or remediate private water and sewer laterals using public funds and municipal employees if they determine the work "will benefit the public health." 
  • In 2016, Wisconsin Department of Natural Resources established a two-year, $27.8 million grant program to disadvantaged municipalities for full LSL replacement projects on private property. Thirty-five municipalities were awarded funds in 2017 and 30 have applied for funding in 2018. 
  • In 2016, Washington State Department of Health, in response to a Governor’s directive, modified the eligibility criteria for drinking water state revolving fund loans starting August 2016 so that systems that can document the presence of lead service lines and components will be given higher priority. The agency also said it will seek additional federal assistance. Read a case example on Washington for more information. 

​For additional examples of state and community initiatives: 
  • In 2020, Toledo, Ohio began a dedicated initiative to replace LSLs, offering residents zero interest loans to assist with the cost of replacement on the private side.
  • In April 2020, the City of Kalamazoo (which supplied water to Parchment) finished replacing LSLs in the City of Parchment, financed through the state’s Drinking Water Revolving Fund. 
  • In December 2019, Denver Water’s proposed Lead Reduction Program Plan was approved by the EPA. The plan includes full replacement through water rates, bonds, and sales of new connections to the system, hydropower production, among other sources. 
  • In January 2019, the Washington, DC City Council passed a law that will provide financial assistance to redress past partial LSL replacements when the program is funded. For properties where DC Water previously replaced an LSL on public property but not private property, the City will assist the property owner between 50-100% of the cost of replacement up to $2,500. Additionally, if the utility is conducting water infrastructure work or otherwise disturbing the LSL on public property, it will also replace the portion on private property at no cost to the property owner.  
  • In early 2018, Richmond Department of Public Utilities (Virginia) has an LSL Replacement Grant Program where eligible homeowners can receive up to $2,500 toward the cost of the replacement.
  • In early 2018, American Water Capital Corporation applied for $84 million in WIFIA loans from EPA for water main replacement and lead abatement for 20,000 customers in the St. Louis area. The project includes replacement of LSLs on private property.
  • In 2018, Evart (Michigan) used state funding to identify and replace LSLs in the city, including offering LSL replacement at no cost to residents that enter into an agreement with the city.
  • In 2018, Aurora (Colorado) began a proactive program to identify and remove LSLs, including offering rebates and a low-income program to assist residents with the cost.
  • In 2018, Geneva, New York launched their LSL replacement program whereby eligible property can have their LSL replaced at no charge by a contractor obtained by the City.
  • In 2018, Gloversville Water announced in its newsletter that the City had been awarded a grant from the state Department of Health for replacing LSLs on private property. The Water Department began replacing LSLs in September 2018.
  • In 2018, Missouri American Water received approval from the state’s Public Service Commission to continue its program to fully replace the estimated 30,000 LSLs in its 33 community water systems that serves 450,000 customers across the state.
  • In 2018, Indiana American Water received approval from the Indiana Utility Regulatory Commission to use rates paid by customers to fund replacement of LSLs on customers’ property. The plan would fully replace 50,000 LSLs for 300,000 customers in 27 Indiana communities.  
  • In 2018, Kenosha (Wisconsin) developed and the state Public Service Commission approved a financial assistance program under which the water utility provides eligible property owners with a grant up to 50% off the cost of replacement on the private side up to $2,000 combined with a 10-year low interest loan.   
  • In 2018, North Hempstead announced it had received a $611,300 grant from the state Department of Health (NYSDOH) for LSL replacement. Eligible residents can receive up to $7,000 towards the cost of replacement.
  • In 2017, Auburn, New York received funding from the state Department of Health and conducted full LSL replacements at no cost to property owners. 
  • Through Greater Cincinnati Water Works'(GCWW) Enhanced Lead Program, the utility offers cost-sharing for residents and additional assistance to qualified residents through the “Help Eliminate Lead Pipes” program (HELP) which is a one-time cost benefit applied as a credit on the LSL Replacement final bill. GCWW also offers 10 year interest free payback on the balance of private side replacements for residents inside of the city of Cincinnati and some surrounding areas. 
  • In 2017, Providence Water (Rhode Island) launched a program offering 3-year, 0% interest loans to homeowners to assist with the cost of LSL replacement.
  • In 2017, Evanston, Illinois has an LSL replacement program that enables eligible homeowners to apply for a loan up to $4,800 towards the cost of replacement, which can be paid back to the city over 48 months through the property owner’s utility bill.
  • In 2017, Pennsylvania American Water filed a proposal with the state’s Public Utility Corporation to fully replace the estimated 18,000 LSLs in its system.  It would pay for replacement of the portion of the LSL on private property. The case is still awaiting final approval. 
  • In 2017, the Concord Public Works Commission approved a pilot program to accelerate LSL replacement in the town. Under the program, the cost of private-side LSL replacement for eligible property owners does not exceed $1,500. 
  • In 2016 and 2017, the following Wisconsin municipalities created programs using funds made available by the Wisconsin Department of Natural Resources to aid property owners with the cost of LSL replacement on private property:​
  • In 2016, the Massachusetts Water Resources Authority launched a $100 million initiative offering 10-year, interest-free loans to the water communities who receive the wholesaler’s water to fully replace LSLs. MWRA estimates there are 28,000 LSLs in its service area.
  • In 2016, the Boston Water and Sewer Commission enhanced its Lead Service Incentive Program, doubling the incentive by offering its customers a $2,000 credit to LSL replacement. Implemented in 2005, the program also provides interest-free payments to customers on the balance of work over 48 months.
  • In 2016, the Philadelphia Water Department began replacing the full service line, at no cost to the resident, when an LSL is discovered during water main replacements. The department also provides interest free loans for residents interested in replacing the LSL if main replacement is not scheduled.
  • In 2016, the Pittsburgh Urban Redevelopment Authority began offering property owners loans up to $10,000 at 3% interest to assist with the cost of replacing the portion of the LSL on private property.
  • In 2016, Denver Water partnered with Denver Urban Renewal Authority to provide low-interest loans to eligible homeowners to assist homeowners with the cost of replacement.
  • In 2004, the Lansing Board of Water and Light launched its LSL replacement initiative replacing 12,150 active lines at a cost of $44.5 million. The BWL took ownership of all water service lines in 1927 and replaced the last active LSL in December 2016.
  • In 2001, Madison Water Utility began an initiative to replace more than 8,000 LSLs. To ensure full replacement, the council passed an ordinance mandating homeowners replace privately-owned LSLs. Madison Water Utility offered to pay residents half the cost of replacement – up to $1,000 – to ease the financial burden. In 2016, the water utility raised the reimbursement amount up to $1,500. Funds came from fees for cellular antennas on water towers. The utility finished the replacement in 2011.
  • In 1992, the City of Grand Rapids expanded its existing 10 year loan program for residents to allow for financing of LSL replacement (proactive or reactive) on private property. A recent policy from the City enables full replacement at no cost to the property owner under certain conditions. 

For additional examples of state and community initiatives: 
State and federal governments could support local efforts to replace LSLs by finding the means to help utilities and communities get access to needed funding. 

​Opportunities include:
  • For states: state drinking water administrators could consider initiating a or improving their LSL inventory using guidance developed by ASDWA in 2019
  • For utilities:
    • Congress could increase funding to the DWSRF, the Water Infrastructure Finance Innovation Act (WIFIA) program and the LSL replacement grant program.
    • U.S. Department of Agriculture (USDA) could make additional funds available to rural utilities through its Rural Development Program.
    • States could make LSL replacement a priority in their DWSRF Intended Use Plans (IUP), provide below-market rate financing, offer principal forgiveness, and ensure funds reach communities in need.
    • More state public utility commissions could support utility investments in LSL replacement on both utility and property-owner sides of the line as well.
    • States could allow communities to establish special service districts where LSLs are common and allow the cost of LSL replacement to be added to property tax levies. The levy could be subordinated to the mortgage.
    • State utility regulators could allow and encourage utilities to offer low-cost, easy-to-access financing to their customers for the cost of replacing LSLs on private property, with installments repayable as part of the customer’s bill.
  • For communities and property owners:
    • The Department of Housing and Urban Development (HUD) and USDA Rural Development Program could recognize the challenge posed by LSLs and integrate funds for LSL replacement into their various programs to support communities, including tribes. The Small Business Administration could provide loans for commercial property owners. Congress would need to supplement HUD’s and USDA’s existing funding to support these additional requirements.
    • States could provide grants to communities to develop and implement LSL replacement initiatives. In addition, their Consolidated Plans, essential to accessing HUD’s Community Development Block Grants (CDBG), could make LSL replacement a priority.
    • The Federal Housing Administration (FHA) could allow people buying or refinancing homes to add the cost of full LSL replacement to the mortgage without it counting against the loan-to-value maximums similar to what it has done in its Energy Efficient Mortgage Program. In addition, FHA could make LSL replacement an eligible activity for rehab mortgage insurance under Section 203(k) or as a Title I insured loan for property improvements.
    • States (and localities) could use Property Assessed Clean Energy (PACE) programs as a model to fund LSL replacement and use property taxes to recoup the investment.  
    • Municipalities could waive the permit fee for “hazard abatement” to lessen the financial burden on property owners
  • Private investors and foundations could also support local LSL replacement by:
    • Offering social impact or green bonds to communities and utilities that allow investment on private property to replace LSLs as part of a recognition that safe drinking water is essential to building sustainable communities and provide necessary financial support. Success in similar efforts to promote energy efficiency could serve as a model. The Natural Resources Defense Council’s High Road Infrastructure Report provides additional models.
    • Provide financial support for various public health and civic organizations so they can deliver outreach, education and technical assistance to members of the public to help them engage in the LSL replacement initiative.
    • Expand service line protection programs offered by many utilities to their customers so the program pays for replacement, and not just repair of an entire LSL when one fails, and also offers customers a proactive option to replace LSLs before they leak.​