Substitute House Bill No. 6777, also known as Public Act No. 25-142, establishes a framework for water utility systems to implement water quality and treatment surcharges effective July 1, 2025. The bill defines key terms such as "Authority," "Eligible project," and "Perfluoroalkyl and polyfluoroalkyl substances" (PFAS) and outlines the criteria for projects that qualify for surcharge recovery. Water companies can recover expenses for eligible projects that enhance water infrastructure to meet updated drinking water regulations. The bill allows these companies to charge a water quality and treatment surcharge in addition to existing rates, contingent upon approval from the Public Utilities Regulatory Authority (PURA).

The bill stipulates that water companies must submit a water quality and treatment assessment report to PURA, detailing planned eligible projects and their compliance with state and federal standards. The surcharge is calculated based on the actual costs of eligible projects and is subject to limits on the percentage of annual retail water revenues. Additionally, water companies are required to provide annual reconciliation reports to ensure that surcharges align with incurred costs and to notify customers when surcharges are applied. The bill also includes provisions for public input during the approval process and mandates that surcharges be clearly itemized on customer bills.