New Law Affects Water and Wastewater Utilities
Legislation Focuses on Utilities’ Long-Term Sustainability and Readiness
State legislators ushered in a significant change in State law this Spring that impacts water and wastewater utilities by mandating that utilities demonstrate the financial, managerial, technical, and legal capability to continue to operate, maintain, and sustain their facilities into the future.
The new law, as detailed in House Enrolled Act 1459, requires all water and wastewater utilities to submit a detailed Asset Management Plan (AMP) to the Indiana Utility Regulatory Commission (IURC). It also gives the IURC increased regulatory authority to enforce the law. This applies even in communities not currently under the jurisdiction of the IURC.
Authors of the legislation say the law intends to enhance management and oversight of utilities’ assets and improve service reliability to ratepayers. But, they also made concessions to concerns about increasing regulatory oversight and associated costs by allowing utilities serving under 1,000 customers to opt for a simplified AMP reporting form.
More guidance on deadlines for the AMP (and what will be required) is expected to come from IURC by Fall 2025. The new law requires the IURC to issue a general administrative order by Oct. 1 that includes the reporting schedule.
In the past, the Indiana Finance Authority required any utility requesting financing through the State Revolving Fund to certify that it had an AMP in place upon application for funding. IDEM also requires AMP certification when Water Treatment Plants or Wastewater Treatment Plants expand their Average Design Flow.
The new Asset Management Plan Law goes beyond that:
- It now requires every water and wastewater utility to submit an AMP to IURC for review and for the IURC to verify adequacy and compliance with AMP requirements.
- In cases where deficiencies are identified, the IURC is empowered to notify utilities and set deadlines for corrections.
- It gives IURC the authority to increase regulatory scrutiny when it finds deficiencies, including imposing rate reviews or even receivership proceedings for utilities that fail to comply after multiple notices.
- A key provision requires utility governing bodies to complete a training or continuing education program at least once every four years, starting January 1, 2027.
The IURC is expected to follow the IFA guidelines for what is to be included in an AMP that demonstrates the utility has the capacity to operate the system.
Currently, the AMP includes, at a minimum, this information:
- System map
- Inventory and assessment of system assets
- Development of an infrastructure inspection, repair and maintenance plan, including a plan for funding such activities
- Evaluation and implementation of water and energy conservation efforts
- Analysis of the customer rates necessary to support the AMP
- Audit performed at least every two years
- Cybersecurity processes and policies to protect critical infrastructure.
- Demonstration that the utility has the technical, managerial, legal, and financial capability of operating and maintaining its water and/or wastewater system
Commonwealth Engineers has assisted many clients in assembling Asset Management Plans for both Water and Wastewater utilities. For more information on AMPs, contact Theresa Criss-Hartwig.