1. Lead Line Replacement:
Missouri
Geoff Marke, Chief Economist
Missouri Office of the Public Counsel

2. The Lead State Largest lead deposits in the world.
The largest and last (Dec. 2013) primary smelter in the US.
Herculaneum, 300,000 ppm (2001 MO DNR)
4 mills, 6 mines and lead battery recycling plant
US Department of Health and Human Services (2002) Health Consultation: determination if remedial actions are protective of public health. Herculaneum lead smelter site.

4. Prelude

5. School of Athens

6. Michelangelo

7. Goya, self-portrait

9. Into the 20th century

10. Lead presence still today
US EPA (2017) Protecting your family from exposures to lead.

12. Service Lines

13. Lead Prevention policies and blood lead levels in children aged 1-5
Policy Statement from the American Academy of Pediatrics. Prevention of Childhood Toxicity (2016) Pediatrics .

14. Proposed Legislation

15. 386.267 Rate schedules for interim charges or periodic rate adjustment for lead line replacement.
Subject to the requirements of this section, any water corporation may make an application to the commission to approve rate schedules authorizing periodic rate adjustments outside of general rate proceedings to provide for the recovery of costs for the replacement of lead service lines and associated mains, valves and hydrants.

16. Key Points Recovery outside of a rate case;
Extend infrastructure replacement outside of St. Louis County; and
Include lead service lines.
Bill did not move forward.

17. The Service Line

19. Main to service line

20. Interior plumbing

21. Interior Fixtures
Until 2014, brass faucets could legally contain 8% lead by weight
Solders and flux are considered lead-free when they contain 0.2% or less of lead

22. How big of a problem?

23. Incomplete records

24. Pilot Study showed estimates were only 63% accurate
Flint, Michigan included an inventory of any and all available records of the city which were entered into a GIS database.
In total:
43,404 active water accounts;
and 12,632 vacant parcels.
Based on the best available information it was estimated that Flint Michigan’s service lines broke down as follows:
53% copper pipe;
8% lead pipe;
18% galvanized pipe; and
21% unknown.
Pilot Study showed estimates were only 63% accurate

25. Excavation

26. The Flint Report estimated the extraction process at $7,500 per household with additional considerations including (but not limited to):

27. Water and sewer service in same trench Fixture repairs
Permits and Fees
Total about $2,400 per site, or about 25% of the costs of the “average” replacement.
Inspections
Finished basements
Garbage days
Water and sewer service in same trench
Fixture repairs
Large pipe or odd-fittings
Trees
Contaminated soil
Dust
Worker identification
Ridley, G. (2016) Flint lead water line replacement begins with controversy. Bridge Magazine Michigan Live

28. Testing

29. Design can influence results
What parameters?
Pre? Post? On-site? Off-site?
How many times?
What conditions?
Who conducts the test? Ratepayer? Utility? Government? 3rd party?

30. The difference two data points can make

33. Equity

34. The amount of lead in an American’s body tends to be a quantifiable proxy for socioeconomic status (“SES”)
We should also consider the possibility that in addition to SES being a proxy for lead exposure, it might also be, in part, a result of lead exposure.
Bellinger, D. (2008) Lead neurotoxicity and socioeconomic status: conceptual and analytical issues. Neurotoxicology. 20(5)

35. Catch-22
Raising rates will have a disproportionate impact on low-income households.
Low-income households will likely have higher % chance of lead service lines, fixtures and other lead-based material in place.

36. Who pays? Cost Allocation

37. Customer Specific Pricing

38. District Specific Pricing

39. Zonal Pricing

40. Single Tariff

41. Single State

42. Disclosure

43. Property Value and Resale

46. Environmental Defense Fund State Disclosure Polices for lead pipes
McCormick, L. et al. (2017) Grading the nation: state disclosure policies for lead pipes. Environmental Defense Fund

47. Rate Base Treatment

48. To be determined…

49. Who’s first?

50. Which customers get priority?
What about past partial replacement ?
Vacant homes and property?
Schools? Homes with children?

51. Next Steps?

52. Missouri OPC’s position
Acknowledges current practice is flawed
Propose a pilot study
3rd party stakeholders
Academic Institutions
Non-profits
Explore outside funding opportunities & education
Dialogue with regulatory and legislative leaders
Hard look at short and long-term opportunity costs and unintended consequences.

53. Questions? Additional Resources
Lead Service Line Collaborative.
American Water Works Association.
Geoff Marke, Chief Economist
Missouri Office of the Public Counsel