WATER INDUSTRY NEWS
Utility regulators seek lawsuit insulation for water companies
Thursday, February 14, 2008

WASHINGTON — The nation’s utility regulators are expected to vote next week on a resolution asking state governments to give water-supply companies that comply with state and federal safe drinking water standards “safe harbor” against lawsuits by those who would claim they’ve been harmed by drinking water.


The object of the resolution, according to a text of it provided by the National Association of Regulatory Utility Commissioners (NARUC), is to prevent the cost of such lawsuits from becoming an undue economic burden on water suppliers and their ratepayers.


NARUC will consider that and other resolutions at its Winter Committee Meetings, to be held February 17-20 in Washington. The group is a trade association representing state public service commissioners who regulate essential utility services.


The group notes that at least two states have passed such legislation already and that California courts have ruled that regulated utilities in that state which comply with drinking water standards are immune from such lawsuits.


It was not immediately clear from NARUC how many lawsuits alleging harm from drinking water have been filed across the nation and what their financial impacts have been on water utilities.


However, the proposed resolution states: “Litigation against water companies seeking to impose liability on water companies, even though those water companies have supplied drinking water in compliance with all federal and state safe drinking water standards, will undermine the consistent, science-based federal drinking water standard-setting process, legislatures’ statutory role and commissions’ regulatory role in setting safe and reliable drinking water standards, and will place an undue economic burden on water companies and their ratepayers.”


It also notes that water and other utilities and their ratepayers are under heavy financial pressures to repair and build up-to-date infrastructure such as pipes and water treatment plants, and that costly lawsuits would impede infrastructure work and cost-efficient operations.


For more information on NARUC, click here.


To find the text of the resolution, click here.


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