Emerging Issues Facing the Water Industry

Recap of Bills Passed in 2015 Summary of New Laws Available Today Reviewed at CWWA Spring Meeting

◦Streamlines approval of installation of service pipes that cross intervening properties by eliminating requirement for PURA approval ◦PURA regulated companies may approve property owner's application to install a service pipe across intervening properties as long as conditions currently in PURA regs are met PA Intervening Property Lines PA Community Water Systems PURA, on their own or upon request by DPH, can investigate if rates of small systems are adequate to maintain viability and service to its customers

PA Water Revenue Adjustment Prior law allows annual rate adjustment to reconcile difference between PURA-approved revenues and actual revenues in calendar year The bill changes time period this can be in place to the 6 th year after the company: 1. filed its last rate case; 2. initially established the charge; or 3. has a prior rate case reopened and (a) PURA resets rate levels, (b) Water Infrastructure and Conservation Adjustment surcharges are rolled into base rates, or (c) other authorized rate changes are made under a settlement agreement or other PURA action. Allows PURA to extend the company's charge for an additional three years after the six-year period, at the company's request

Political & Budget Considerations 2016 ‘Short Session’  February to May Constant pressures Significant budget challenges remain  Shifts attention and focus of legislators State employee contracts under negotiation

Potential Issues in 2016 Sales Tax on Private Water Companies ◦ PA repealed the sales tax exemption for private water companies ◦ Additional cost for customers of private water companies ◦ Extremely complex to implement ◦ CWWA provided testimony to state Tax Panel urging reinstate the exemption ◦ Will look to change in 2016

DEEP formula for reimbursement to towns for main installations to serve areas impacted by contaminated wells ◦ Formula penalizes towns that upsize pipes for fire flow or other public health needs ◦ Approved in 2015 for single community --- should be broadened for other situations Revisit Small Systems/Acquisition ◦ Define roles of DPH and PURA in proceedings ◦ Identify ways to improve process/outcomes Sodium Notification Requirements Potential Issues in 2016

Perennial Issues – Back in 2016? Virtual Net Metering FOIA New fees or taxes Other ???? Fluoride

State Water Plan PA Directs the WPC to Develop a State Water Plan by July 1, 2017

State Water Plan Public Act Required Plan Elements 1.Identify water quantities & qualities 2.Balance public water supply, economic development, recreation and ecological health 3.Recommend technology, infrastructure upgrades and interconnections 4.Consider the potential impact of climate change on the availability and abundance of water resources 5.Provide for data-driven water planning & permitting decisions

State Water Plan Must consider individual water supply plans, water quality standards, stream flow classifications, water utility coordinating committee plans, the state Plan of C & D Recommend the utilization of the state's water resources, including surface and subsurface water, in a manner that balances public water supply, economic development, recreation and ecological health; Approval Process – If legislature does not affirmatively reject the plan by July 1, 2018, plan is deemed approved

Plan by Committees?  Water Planning Council  Steering Committee  Policy Committee  Technical & Science Committee  Water Planning Council Advisory Group $500K approved by Bond Commission

How Will Funds Be Used? a) project manager to continue to steer us forward in the planning process; b) consultant to actually help us create the template for a plan and to help us populate the same; c) consultant manager to make sure the consultant stays on task and meets certain benchmarks going forward; d) any other areas where we may need to spend funds to move this project forward Who will do the actual work????

Where do we go from here? Members involved on committees, at meetings Revise plan approval process through legislation! Share concerns early & often – written record Press for public process with meaningful stakeholder involvement Water industry communications plan; engage other stakeholders Be prepared to develop research/data

Thoughts or suggestions today?

CWWA Legislative Planning Session October 30 th Attend the Session! Share your ideas with Betsy or one of the tri-chairs