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 state or federal drinking water regulations. Water companies must file a request for approval with the Public Utilities Regulatory Authority (PURA), including a water quality and treatment assessment report that outlines planned projects and demonstrates compliance with relevant standards.

The bill stipulates that the water quality and treatment surcharge can be charged in addition to existing rates, with specific criteria for approval by the authority. The surcharge is capped at 15% of the company's annual retail water revenues and must be recalibrated with new base rates following general rate case filings. Water companies are required to submit annual reconciliation reports to ensure that the surcharges are appropriately applied and to address any discrepancies in revenue collection. Additionally, companies must inform customers when surcharges are applied, ensuring transparency in billing.