Hearing on N.J. American Water Rate Increases Set for Sept. 27

The New Jersey American Water Company (NJAWC) will hold a public hearing 2 p.m. Thursday, Sept. 27, at the Ocean City Free Public Library to solicit feedback on proposed rate increases that could take effect in 2013.

In a prepared statement by Bob Brabston, an attorney for NJAWC, the proposals are "simply a pass-through of costs that NJAWC incurs in purchasing water and wastewater treatment service," from different companies and entities. He added the company "does not collect any profit or upcharge on costs it proposes to recover through this petition."

Brabston said NJAWC would increase its revenues by just over $1.5 million.

Christine Juarez, an attorney with the New Jersey Division of Rate Counsel, said her office is "conducting a comprehensive examination of new Jersey American's proposal to verify the reasons for the increase in charges and to determine whether the Company's calculations are accurate."

The water company hopes to implement what it calls a Distribution System Improvement Charge. Richard Barnes, NJAWC external affairs manager, said the new fee would help the company update its aging infrastructure.

NJAWC documentation (see attached PDF) suggests a typical homeowner might see a maximum monthly surcharge of $2.97.

Barnes said much of NJAWC's infrastructure dates back to before World War II and will need to be replaced in the next five to 10 years. "It's always better to begin replacing infrastructure before it breaks," he said.

He said the company is responsible for ensuring their close to 8900 miles of pipe throughout the state are operating efficiently. "At the rate that we're replacing infrastructure it would take us hundreds of years based on our current funding mechanisms to replace our infrastructure," he said. "We're looking for creative ways to replace our infrastructure."

The also proposes sewerage treatment rate increases (see attached PDF). Under the proposed increases, an Ocean City home that uses 20,000 gallons in the summer quarter would see an 11.89 percent increase — from $56.11 to $62.78 per month.