4.	Commitments

The Company has committed a total of approximately $10,079 for an additional raw water pumping station and force main, of which $10,037 remains to be incurred as of September 30, 2016. The Company may make additional commitments for this project during the remainder of 2016.

During its recently completed triennial testing, the Company determined it exceeded the action level for lead at the customer's tap as established by the Lead and Copper Rule issued by the U.S. Environmental Protection Agency. The rule allows the Company to have five samples of the 50 high-risk homes tested exceed the action level of 15 parts per billion (PPB). The testing found that six properties with lead service lines, all built before 1935, exceeded the action level, and the reported exceedance amount was just 1 PPB. The Company has determined that only 3% of the company-owned service lines in the system are lead. The Company will be required to engage in more frequent testing for lead, public education, and annually replace 7% of the remaining company-owned lead service lines in its distribution system. The Company has announced plans to perform in excess of the required actions. Specifically, the Company will provide the affected customers with a free water test and a 200 gallon per month credit to flush their line in order to reduce any lead content until their lead service line has been replaced. The cost of the water tests and flushing credits is expected to be approximately $71 over the next four years. In addition, the Company expects to exceed the mandated replacement schedule by replacing all of the remaining company-owned lead service lines within the next three to four years. The cost for these service line replacements is estimated at $4,600, and will be integrated into the Company's annual capital budgets for replacements over the next three to four years. The Company may update these estimates as more facts become available.