Business & Finance

Splash of Cold Water: New Jersey American Water Seeks 25% Rate Jump


SOUTH PLAINFIELD, N.J. - A glass of spilled milk may cost less than water if the Board of Public Utilities ( approves a rate hike request from your water company. Specifically, South Plainfield residents are facing a 25 % rate increase to their bills under a proposal by New Jersey American Water.

In a petition on the 10/20/17 agenda with the Board of Public Utilities, NJAW seeks approval of increased tariff rates and charges for water and wastewater service with a change in depreciation rates and other tariff modifications. The petition was filed originally on September 14, 2017. 

Local residents and others impacted have options and can speak out for or against the action proposed. On January 10, 2018 at 6PM, residents can attend a meeting to state their concerns. The meeting will be held in the Howell Township Municipal Building located at 4567 Route 9 North, Howell NJ 07731.

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Financially, if your usage is a low 6,000 gallons per month, your current bill is $46.64 per month. That would increase to $53.50. 

They initially proposed the new rates for October 15th, 2017 but the BPU ordered them to conduct public meetings and postponed any action due to the increases proposed, among other factors. If approved, the changes will net the company an additional $129.3 Million – overall total increase of 17.54%.

The company, in its filings, state that the changes will do the following:

·        To establish an income level that will permit the company to finance essential and continuing plant investment

·        To permit the company to earn a fair and adequate rate of return on its net investment in used and useful property

·        To establish rates which will be sufficient to enable the company, under efficient and economical operation, to maintain and support its financial integrity and to raise such funds as may be necessary for the proper discharge of its duties and

·        To provide earnings sufficient to attract investors and provide sufficient cash flow to fund the companies operations and

·        To enable the Company to continue to provide safe, adequate ad proper service to its customers.

It is not without precedent for a water company to acquire another water company and finance the purchase on its new and existing users. Such may be the case here. Shorelands (previously servicing Colts Neck and Holmdel) was recently purchased by New Jersey American Water. Shortly thereafter, NJAW submitted their petition for a 25% increase.

It is expected that all of these details will be discussed by the public during upcoming meeting opportunities, including in Howell. The BPU Members include President Richard Mroz, Commissioners Joseph Fiordaliso, Mary-Anna Holden and Upendra Chivukula. The President of New Jersey American Water is Robert MacLean, NJAWC Corporate Address is 1025 Laurel Oak Road Voorhees, N.J. 08043

The final rates and charges are decided by the Board of Public Utilities. You can find out more by visiting http://newjerseyamwater.com or contacting your local legislators. The Docket Number is WR17090985

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