Why can't they bill for it? It's not like they are losing money on it, it's simply getting priced into the billable services they provide. Utilities are usually monopolistic, so there is little incentive for them to fix this.
They do, but rates are regulated, they can’t just tack on this month’s pipe replacement expenses. They have to make a guess, propose a rate increase, and get it approved by the relevant regulator or government authority.