Fitch Ratings: New Lead and Copper Rule will raise costs for water utilities

The U.S. Environmental Protection Agency’s (EPA) new Lead and Copper Rule (LCR) is not expected to impact utility credit quality over the near-term, but it could have a material effect on certain water utilities’ capex and credit profiles over the medium- to long-term, particularly for those utilities that serve communities with a large proportion of older homes and buildings that will likely require greater lead service line (LSL) remediation, Fitch Ratings says.

The LCR is expected to raise near-term operational costs for all utilities and negatively affect capital budgets in the longer term as LSLs are identified and replaced.