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 "PFAS," and allows water companies to recover expenses for eligible projects that enhance water infrastructure to meet updated drinking water regulations. Water companies must file a request with the Public Utilities Regulatory Authority (PURA) to impose a surcharge, which can be charged in addition to existing rates. The bill outlines the criteria for eligible projects, including compliance with drinking water standards and the necessity of improvements to address contaminants like PFAS and lead.

The bill also stipulates that the surcharge must be approved by PURA through an administrative proceeding, which includes public input and must be completed within a specified timeframe. The surcharge is capped at 15% of the water company's annual retail water revenues and is subject to annual reconciliation reports to ensure compliance with authorized revenue requirements. Additionally, water companies are required to inform customers about the surcharge through direct communication. Overall, the legislation aims to enhance water quality and infrastructure while providing a structured process for water companies to recover associated costs.