New Jersey American Water seeks $10 a month rate increase

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New Jersey American Water wants to increase its customers’ water bills to help fund more than $1 billion in water and wastewater projects.

The investor-owned utility said the average customer could expect to pay an additional $10 per month if the request is approved by the New Jersey Board of Public Utilities. That could make the average monthly residential water bill rise to $93.89.

Customers served by sanitary wastewater systems would see an average increase of $8 per month. Households that receive both services could see a combined impact of about $18 per month, depending on their service area, meter size, and usage.

New Jersey American Water said the rate increase is essential to improve aging infrastructure, replace dangerous lead service lines and address toxic chemicals such as PFAS. President Mark McDonough said the revenue would ensure the company can deal with problems before they become acute.

“This rate case is really aimed at the investments we’re already making to stay ahead of problems,” he said. “If we do good planning and we’re proactive in prudent investment, we can really keep our customers receiving safe, reliable water and we maintain the affordability that we have.”

The request comes roughly 16 months after the company increased rates by more than $5 per month.

Water infrastructure across the U.S. is aging, and according to the U.S. Environmental Protection Agency, the nation needs at least $630 billion over the next 20 years for stormwater and wastewater projects alone. When combined with drinking water upgrades, water providers need a total of more than $1 trillion.

“Rate increases are definitely something that we see all around the country because of upward pressure on rates that’s driven by the need to invest in aging water systems,” said Larry Levine, a senior attorney with the Natural Resources Defense Council’s environmental health program.

Water providers are faced with new federal regulations requiring them to remove toxic chemicals such as PFAS from drinking water, replace lead pipes and to reduce wastewater discharges into waterways. Though the federal government under the Biden administration set aside billions of dollars to upgrade water and sewer infrastructure, providers say more funding is needed.

Pennsylvania American Water similarly filed a request with the Pennsylvania Utility Commission in November to fund $1.2 billion in water and wastewater system upgrades. If approved, the average water customer would pay an additional $14 per month on their bills.

While some rate increase is expected, it is unlikely that New Jersey American Water will be awarded the full request, said Brian Lipman, director of the New Jersey Division of the Rate Counsel, a state agency that advocates to keep costs affordable for ratepayers. He said the agency does its best to ensure rate increases are necessary to support infrastructure investments without unduly impacting consumers.

In an effort to alleviate the burden on rate payers, New Jersey American Water is seeking approval from the BPU to expand access to monthly bill discounts through its H2O Help to Others program. The company is asking to automatically enroll customers who partake in energy assistance programs like the Low Income Home Energy Assistance Program, or LIHEAP. If approved, New Jersey American Water would be the only utility in the state to offer automatic enrollment in water bill assistance.

“Water is so fundamental to sustaining life,” McDonough said. “We think it’s very important to have this kind of forward thinking program to be able to help those folks who may need some assistance.”

New Jersey Gov. Mikie Sherrill issued an executive order last week that aims to pause further rate increases for energy. However, no similar action has been taken for water bills and there’s currently no state-run program to help residents pay their water bills.