New Jersey Surcharge Enables Utilities To Upgrade Infrastructure

An extra charge that showed up on New Jersey water bills a couple years ago has enabled utilities to invest millions in infrastructure.

United Water, the major provider in North Jersey, has spent $32 million on upgrades, according to The Record.

"That work cut the water lost to leaky pipes by more than a billion gallons in the past year. But more needs to be done: The company lost 10.6 billion gallons in 2013, the equivalent of three Oradell Reservoirs," the report said.

The effort has allowed the company to target water loss through a series of projects.

"United Water, a for-profit company, has completed projects in 25 towns in Bergen, Hudson and Sussex counties. It has replaced or rehabilitated 34,000 feet of water mains — more than 6 miles' worth, or the length of 94 football fields laid end to end. It has also replaced 700 short mains and valves, 400 fire hydrants, 2,000 domestic lines and 30 fire lines," the report said.

Steven Goudsmith, the company spokesman, explained the success of the program.

"There's been great progress," he said, per the report. "This investment represents an exceptional value for our customers, and it makes sense to continue the program."

"The cost to the average ratepayer has been less than 75 cents a month, or $9 per year, Goudsmith said. So far, that has raised $2.2 million toward the $32 million spent on such projects. The fee will continue to be charged until the full cost of the projects is recovered, he said," according to the report.

In 2012, the New Jersey Board of Public Utilities (BPU) authorized three major water companies to implement a distribution system improvement charge (DSIC).

"According to the BPU, an average residential customer with a 5/8″ meter will be subject to a maximum monthly DSIC surcharge ranging from $1.77 (United Water) to $2.97 (New Jersey American)," according to the National Association of Water Companies (NAWC).

Still, New Jersey has a long way to go when it comes to upgrading its infrastructure. The state has reported $8 billion in drinking water infrastructure needs and $32.5 billion in wastewater infrastructure needs over the next two decades, according to the American Society of Civil Engineers.

For more on project funding, check out Water Online's Funding Solution Center.

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