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The importance of distribution systems is quite obvious considering the fact that generally between 60 and 80 percent of the capital investment (or utility plant) in a utility is allocated to the distribution, or delivery, of finished water. Water mains are the key component of a distribution system, and represent the largest capital investment. Distribution systems have a direct impact on customers, as problems arising from distribution systems are the source of most customer complaints. Potable water pipeline systems deteriorate over time, with the rate of deterioration being influenced by a number of factors such as pipe age, water quality, structural loading, soil conditions, and operating conditions. Historically, the level of maintenance (in terms of rehabilitation or replacement) carried out on distribution system mains has been relatively low compared to that for treatment facilities. The fact that mains are located underground and therefore are invisible often hides the need for maintenance and investment. Recently, however, there has been an increased focus on the strategic rehabilitation/replacement of distribution systems as well as meeting the on-going repair requirements. The objective of developing a capital program for main rehabilitation/replacement is to minimize supply problems related to system deterioration and to enhance system reliability. This paper presents the basic steps a utility can take to develop a capital program for the rehabilitation/replacement of its water mains. The procedures that are described have been utilized at United Water Resources operating companies to develop capital planning programs. Includes table, figures.