In January, The Pennsylvania Infrastructure Investment Authority (PENNVEST) approved a low interest loan of more than $65 million to PWSA to finance an ambitious water main replacement program and continue our highly successful efforts to remove lead service lines. The loan is the single largest drinking water funding offer in PENNVEST’s thirty-one-year history.
The PENNVEST loan will support the first phase of our small diameter water main replacement program, which will total more than $326 million upon completion. Phase 1 will include the replacement of just under 80,000 feet of aging water distribution mains, along with the publicly owned portions of more than 2000 water service lines. This includes approximately 850 lead public service lines. Where the private portion of the service line is also lead, it will be replaced as well.
By proactively replacing aging water mains throughout our system, we can improve reliability and reduce the frequency and severity of service disruptions, while also continuing to aggressively replace lead service lines.
At 1 percent interest over a term of 20 years, we estimate that this loan will save our rate payers $20 million when compared to other types of borrowing. Pursuing financing options like PENNVEST is part of our commitment to being smart financial stewards, limiting the cost burden for our customers as we implement much-needed infrastructure rehabilitation and replacement projects.
This is our second PENNVEST award in recent years, a sign of growing confidence in our ability to deliver critical projects. In 2018, we received a $35,441,231 loan and a $13,687,173 grant from PENNVEST to fund lead service line replacements across our water service area. This funding allowed us to replace over 3,000 lead lines in 2019 and is projected to allow us to replace an additional 1,600 in the first half of 2020.
The small diameter main replacement program is part of our ambitious 2030 plan for system renewal. Learn more about the plan at pgh2o2030.com.