Lead service line replacement can be expensive, ranging from $1,200 to $12,300 per line replaced, with an average cost of $4,700. The cost of replacing all of the nation’s lead service lines may be as much as $47 billion, although independent groups place that number higher.
The actual cost of replacement can vary significantly and reflects several factors, including the length of the service line, the technique used to install the new service line and the built environment where the service line is located. Working around trees, walls and driveways can quickly affect the cost of replacement, as can breaking through a basement wall.
The Minnesota Department of Health completed a study in 2019 estimating the cost to replace all 100,000 lead service lines in the state at just over $4 billion, with benefits to public health and the economy reaching more than $8 billion.
Federal Funding and Financing
The federal government has several funding and financing programs states and local governments can use to mitigate lead in drinking water, including but not limited to the funds outlined below:
Drinking Water State Revolving Funds
The Drinking Water State Revolving Loan Fund (DWSRF) was established in 1996 and is a financial assistance program to help water systems and states achieve the health protection objectives of the Safe Drinking Water Act. The EPA awards grants to states based on a needs assessment and states may use these funds to subsidize replacement costs, provide forgivable loans or provide grants to private homeowners to replace their LSLs. Eligible projects include infrastructure replacement, corrosion control, lead testing and education, and emergency protocol. For example, New Jersey uses the DWSRF to distribute $30 million to utilities for property-owner loans to replace LSLs.
In 2019, the Water Infrastructure Fund Transfer Act addressed a lack of funding for LSL replacement projects by allowing a one-time transfer from the Clean Water State Revolving Fund (CWSRF) to the DWSRF for lead-related DWSRF-eligible projects. The transfer had to be completed by October 2020 and states had to develop plans for these funds before the transfer could take place, so in most states projects for this funding have already been selected. Nine states took advantage of the transfer, including Illinois, Massachusetts, Michigan, New Jersey, Ohio, Pennsylvania, Rhode Island, Vermont and Wisconsin.
Community Development Block Grant
The federal Department of Housing and Urban Development administers the Community Development Block Grant (CDBG) program, providing communities with resources to address a wide range of development needs, which could include LSL replacement. The goal of the program is to ensure affordable housing and provide services to vulnerable communities, and not necessarily for the replacement of LSLs. However, a community may include the replacement of LSLs as part of the CDBG request as the funds can be used to buy, construct or repair public facilities such as water and sewer systems. For example, Florida lists the CDBG program as a funding source with $18 million to $26 million available annually for community water projects.
Assistance for Small and Disadvantaged Communities Grants
The Water Infrastructure Improvement for the Nation Act (WIIN) created a program to assist public water systems in underserved, small and disadvantaged communities in complying with the Safe Drinking Water Act (SDWA). Eligible projects include investments for compliance with SDWA, which can include LSL replacement to meet lead standards for disadvantaged communities that have a contaminated public water system. Arizona, Massachusetts and Virginia have used funds from this project to address lead issues in small communities.
Water Infrastructure Finance and Innovation Act
Established in 2014, the Water Infrastructure Finance and Innovation Act is a federal credit program for eligible water and wastewater infrastructure projects. Any project, including LSL replacement, eligible under the CWSRF or the DWSRF is also eligible under the WIFIA.
Lead Testing in School and Child Care Program Drinking Water Grant
Authorized under the Water Infrastructure Improvements for the Nation (WIIN) Act, the EPA’s Lead Testing in School and Child Care Program Drinking Water Grant creates a voluntary program to assist with testing for lead in drinking water at schools and child care programs. The funding can be used to carry out testing in accordance with the EPA’s 3Ts for Reducing Lead in Drinking Water in Schools and Child Care Facilities guidance or other applicable state regulations, or with guidance that is equal to or more stringent than the federal lead-reduction guidance. A minimum of 6.4% of the funding available via the grant is distributed to tribal education agencies to conduct testing.
Infrastructure Investment and Jobs Act
In addition to the funding mechanisms described above, the new Infrastructure Investment and Jobs Act (IIJA) authorizes an additional $11.7 billion for traditional DWSRF uses and another $15 billion dedicated solely to LSL replacement. If a state does not have a use for the lead allocation, it is redistributed to other states (using the SRF formula) for lead pipe replacement. Corrosion control treatments are not eligible for funding via this new portion of funding. Notably, states are not required to provide a cost share, and 49% of the funding will be administered as grants and completely forgivable loans.
The IIJA also extended the EPA’s Reducing Lead in Drinking Water Grant, created under WIIN, to support the replacement of lead water lines and increased its annual authorization by $40 million to $100 million for five years. It also authorized over $200 million over five years to address lead contamination in schools via testing and remediation. For more information on IIJA and implementation guidance as it is released, please visit NCSL’s webpage.
State and Local Funding and Financing
Dedicated State or Community Funds
Several states have a dedicated fund to contribute to LSL replacement. For example, Virginia’s Lead Elimination Assistance Program (LEAP) offers grant funding to localities and waterworks to create and maintain LSL replacement programs. The program dispenses up to $5,000 for each complete service line replaced, with a total budget of $2 million per funding application cycle. Single-family homes, apartments, schools and daycare centers are all eligible.
Wisconsin established the Private LSL Replacement Program in 2020, aiming to provide $63 million in funding for replacement at homes, schools and day care facilities. The program will cover construction and engineering costs, with priority given to municipal populations under the poverty level.
In October 2020, Michigan’s governor announced the MI Clean Water Plan, a $500 million water infrastructure investment that set aside over $102 million for LSL replacement in disadvantaged communities. In September 2021, the governor proposed a $200 million expansion for additional LSL replacement.
Water utilities can charge the ratepayer for the cost of replacement. However, in many states, utilities are limited or prohibited from charging for activities performed for a private interest, such as replacing LSLs to private homes. Indiana responded by enacting House Bill 1519 in 2017, allowing the Indiana Utility Regulatory Commission to approve proposals that fold the cost of LSL replacement into water rates. In Pennsylvania House Bill 674, also from 2017, allows municipal authorities to use public resources to replace or remediate private water and sewer laterals if the municipality determines the work “will benefit the public health, the public water system or the public sewer system,” which can include LSLs. Wisconsin Senate Bill 48, from 2018, allows a municipality to choose whether to provide a grant or loan to replace a lead service line and request to raise water rates from the state Public Service Commission.