HB 6777 creates a new mechanism allowing regulated water companies to recover certain costs for major water infrastructure projects through a separate “water quality and treatment surcharge.” The surcharge is available only for eligible projects that the Public Utilities Regulatory Authority (PURA) determines are critical additions, upgrades, replacements, or improvements needed to comply with state or federal drinking water rules adopted or amended after December 16, 2021, and that are not already in rate base or covered by existing statutory provisions. The bill is aimed at projects tied to drinking water quality, including treatment and system changes needed to address PFAS, lead, and other contaminants.
To use the surcharge, a water company must file a water quality and treatment assessment report and obtain PURA approval. The report must identify planned eligible projects over a five-year period and explain how they meet specified criteria, including compliance with water quality standards and the need for treatment or source development. PURA must approve the report and then separately approve the surcharge amount in an administrative proceeding, with deadlines of 180 days for the report review and 60 days for the surcharge decision. The surcharge is billed separately, may be applied no more than annually, and is capped between general rate cases at 15% of annual retail water revenues overall and 7.5% in any 12-month period.
The bill also adds annual reconciliation and refund requirements. Water companies must file yearly reports comparing collected surcharge revenue to authorized revenue needs, and any overcollection must be refunded to customers with carrying costs, while undercollections may be recovered without carrying costs. The surcharge resets to zero when new base rates are approved in a general rate case, and customers must be notified when the surcharge is first applied. The law takes effect July 1, 2025.
The bill’s impact on state law is to expand PURA’s authority and create a new statutory pathway for water utilities to finance water quality-related capital projects outside of traditional base-rate proceedings. It modifies the rate-setting framework in Title 16 by authorizing a dedicated surcharge, establishing filing, review, billing, and reconciliation procedures, and setting customer protections and caps. It is likely to affect regulated water companies, PURA, and customers who may see separate line-item charges on bills for qualifying infrastructure investments.
Overall sentiment appears strongly favorable. The bill passed committee and both chambers by large margins, including unanimous or near-unanimous votes in committee and overwhelming floor support in the House and Senate. With no committee transcript provided, there is no recorded debate here, but the voting history suggests broad bipartisan agreement that the measure addresses needed water infrastructure and drinking water quality improvements. The main potential point of contention is the customer cost impact, since the bill authorizes utilities to add a separate surcharge to bills; however, the statutory caps, approval requirements, public comment process, and refund/reconciliation provisions appear designed to limit that concern.
HB 6777 amends Connecticut’s utility regulatory framework by authorizing PURA to approve a separate water quality and treatment surcharge for eligible water company projects needed to meet newer drinking water standards. It creates new filing, approval, billing, cap, reconciliation, and refund requirements that apply to regulated water companies and their customers, while preserving PURA oversight and resetting the surcharge when new base rates are set.
The bill appears to have enjoyed broad support throughout the legislative process, with strong favorable votes in committee and overwhelming passage in both chambers. The available record suggests consensus around the need to fund water quality and infrastructure improvements, especially for compliance with drinking water standards and contaminant remediation. Any reservations likely centered on ratepayer impacts and the creation of a new surcharge, but those concerns did not prevent passage.
The principal area of potential contention is whether allowing utilities to recover costs through a separate surcharge could increase customer bills outside the normal rate case process. Consumer advocates or ratepayer-focused lawmakers could be concerned about affordability, transparency, and the breadth of projects eligible for recovery. The bill responds to those concerns by limiting the surcharge to PURA-approved eligible projects, capping the amount, requiring public comment, mandating annual reconciliation, and requiring refunds for overcollections.