(2) (i) The value of the property of a public utility
p roviding water OR WASTEWATER service shall include the
original cost incurred by the public utility for the
replacement of a customer-owned lead water service line
OR A CUSTOMER-OWNED DAMAGED WASTEWATER LATERAL , performed
concurrent with a scheduled utility main replacement
project OR UNDER A COMMISSION-APPROVED PROGRAM ,
notwithstanding that the customer will hold legal title
to the replacement water service line or wastewater
lateral .
(ii) The original cost of the replacement water
service line OR WASTEWATER LATERAL shall be deemed other
related capitalized costs that are part of the public
utility's distribution system.
(iii) The public utility incurring the cost under
subparagraph (i) may recover a return on, and a return
of, the cost that the commission determines to have been
prudently incurred and will help prevent adverse effects
on public health or public safety or help the public
utility comply with laws and regulations pertaining to
drinking water or environmental standards. The return on
costs permitted under this subparagraph may be recovered
for a period not to exceed 10 years from the date the
cost is incurred. FOR THE PURPOSE OF CALCULATING THE
RETURN OF AND ON A PUBLIC UTILITY'S PRUDENTLY INCURRED
COST FOR THE REPLACEMENT OF A WATER SERVICE LINE AND FOR
THE REPLACEMENT OF A WASTEWATER LATERAL THAT IS RECOVERED
IN A PUBLIC UTILITY'S BASE RATES OR DISTRIBUTION SYSTEM
IMPROVEMENT CHARGE, THE COMMISSION SHALL EMPLOY THE
EQUITY RETURN RATE FOR WATER AND WASTEWATER PUBLIC
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