Committee hears testimony on House Bill 1459 to require asset-management plans for unregulated water and sewer utilities

Representative Pressell told the committee that House Bill 1459 would require unregulated water and wastewater utilities to adopt and file asset-management programs and create a three-strike enforcement sequence aimed at protecting ratepayers.

"House Bill 14 59 really focuses around asset management programs for unregulated sewer and wastewater utilities," Representative Pressell said, describing the measure as "a good rate payer protection bill." The bill would require utilities not currently under IURC jurisdiction to file an asset-management program with the Indiana Utility Regulatory Commission every four years and describes stepwise consequences for repeated compliance failures.

The bill’s text, as explained at the hearing, directs that after an IDEM violation the IURC would work with the utility — within a stated period (30 days, per testimony) — to document how the utility will address the problem. A second violation for the same deficiency would prompt an informal IURC review (described in testimony as an informal rate case), and a third violation would subject the utility to receivership under the terms described in the bill author’s presentation.

Tom Eisley of Purdue University provided a progress report on a Purdue-led pilot to develop asset-management plans for very small utilities. Purdue has worked on an interim plan for a community referred to at the hearing as "Switch City," where volunteers and graduate students compiled a condition assessment and began replacing meters. Eisley said the pilot revealed high nonrevenue water and infiltration-inflow issues; he reported the town had been losing roughly 49% of metered water to nonrevenue uses and measurement error.

"We started working with a small utility. That small utility... is less than 300 people," Eisley said, describing the pilot as a learning project meant to produce a model program and a living lab for new technologies. He said staff had completed data acquisition and planned to present findings to the town board in April.

Stakeholders split over the bill’s cost and scope. Kerwin Olsen of Citizens Action Coalition testified in support, calling the bill a protection for ratepayers but acknowledging small utilities’ challenges. "We do see it as a good thing for rate payers," Olsen said.

The Alliance of Indiana Rural Water, represented by Lindsey Moss Willie of Bowes Public Affairs Group, testified as neutral and urged technical assistance and recognition of existing plans filed with the Indiana Finance Authority (IFA). Moss Willie asked that IFA-submitted asset-management plans be accepted to avoid duplicative work when utilities apply for State Revolving Fund (SRF) loans.

Amy Krieg, government affairs director with AIM (representing cities and towns), said AIM supports the bill’s intent but raised concerns that requiring municipalities to create separate plans for IURC submission could duplicate SRF/IFA requirements and impose financial and administrative burdens. She also warned that the bill’s two- and three-strike enforcement sequence might not give municipalities sufficient time to remedy deficiencies before jurisdiction shifts to the IURC.

Utilities emphasized scale and cost differences. Charles Gill, water utility manager for Greenfield, said his utility’s asset-management plan cost about $30,000 and that plans can take different forms depending on system size. By contrast, Bart Giesler of West Central Conservancy District opposed the bill, citing cost estimates and the checklist in the bill that mirrors SRF loan requirements; he urged targeting the requirement rather than applying it statewide. Giesler noted existing oversight options, including audits by the State Board of Accounts and statutory remedies for interested parties to seek court orders under current law (cited in testimony as Ind. Code section 14-33-5-24).

IURC staff provided workload and scope estimates. Luke Wilson said state records do not list every utility but estimated roughly 991 water and wastewater utilities would be nonjurisdictional under current definitions and therefore newly subject to the bill’s filing requirement. Wilson’s staff estimated an initial review would take about 1.5 hours per plan; on a four-year filing cycle that translates to roughly 250 plan reviews a year and about 375 staff hours, or roughly 10 weeks of one staffer’s time, if the bill moves forward unchanged.

Committee members and senators expressed broad interest in the goals of the bill while flagging costs, duplication with IFA requirements, staff capacity, and the need for technical assistance and phased implementation. Senator Torreo stressed that many small systems are old and lack institutional knowledge; Senator Buchanan and others asked for clearer measures of system condition and clarifications about who would bear costs.

Representative Pressell closed by noting the testimony: "I think you've heard the need... I think you've heard some concerns that... we're just not sure how to move forward, with doing it cost effectively and cost is absolutely important." The committee chair then held the bill for amendment work and said members will continue discussions before reconvening.

Votes at a glance: No formal motions or votes on House Bill 1459 were recorded at this hearing; the committee took no vote and instead held the bill for amendment and further drafting.

Ending: The committee will continue to work with stakeholders and staff to amend the bill; there was no final action or vote on House Bill 1459 at this meeting.