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New Jersey American Water Granted New Rates by NJ Board of Public Utilities

The New Jersey Board of Public Utilities (NJBPU) approved today new water and wastewater rates for New Jersey American Water. The new rates reflect the more than $285 million the company has invested to replace and upgrade its water and wastewater treatment and distribution/collection facilities to provide customers with continuous access to high-quality, reliable service. The NJBPU also approved the company’s proposed enhancements to its low-income customer assistance programs. The NJBPU-approved rates, which go into effect on Jan. 1, 2011, represent a $39.9 million increase for the company. Even with the increase, the cost of a gallon of tap water is still less than a penny.

“At less than a penny a gallon, water remains one of the lowest utility bills for homeowners,” said John Bigelow, president of New Jersey American Water. “While we recognize the difficulty that increased utility costs impose on our customers, we have a responsibility to properly maintain and upgrade our systems to ensure quality, reliable water service and fire protection for the communities we serve. And, to do it right requires significant capital investment. The consequences of not maintaining our systems would have a far greater negative impact on the health, welfare and economic stability of our customers and the communities they live in.”

Infrastructure improvements that have been completed by the company that will be recovered in the new rates include:

  • Replacing, cleaning, lining and rehabilitating miles of pipelines
  • Improving water treatment facilities and wells
  • Updating water storage tanks to enhance service reliability
  • Improving pumping stations for more reliable water pressure
  • New or improved fire hydrants to enhance fire protection

“While customers have been enjoying the benefits of many of the investments we’ve already made, the cost to finance these upgrades were not covered in our prior rates,” explained Bigelow.

The new rates granted by NJBPU provide additional help for customers who have been particularly hard hit by the current economic environment. In addition to providing the company’s low-income programs with increased funding, eligible customers will be able to receive a comprehensive telephone audit of their water use; free water-saving retrofit kits; as well as plumbing assistance to install water-efficient devices. “For those families who are struggling to pay their bills, we want them to know that assistance is available through our H2O Help to Others Program™,” said Bigelow. The program offers grants of up to $500 and a discount on the monthly service charge, and is administered by New Jersey SHARES (1-877-652-9426 or 1-877-NJAWH2O).

Since filing for the rate increase in April 2010, New Jersey American Water's request underwent extensive public scrutiny. The ratemaking process required a lengthy and detailed review by the staff of the BPU, the New Jersey Public Advocate, Division of Rate Counsel, and approximately 20 interest groups who were granted full interveners status in this proceeding. The process also included public hearings for customer input and evidentiary hearings before an Administrative Law Judge. Customers will receive additional information about the rate change with their January bill.

Follow New Jersey American Water on Twitter at twitter.com/njamwater

New Jersey American, a wholly owned subsidiary of American Water (NYSE: AWK), is the largest investor-owned water utility in the state, providing high-quality and reliable water and/or wastewater services to approximately 2.5 million people. Founded in 1886, American Water is the largest investor-owned U.S. water and wastewater utility company. With headquarters in Voorhees, N.J., the company employs more than 7,000 dedicated professionals who provide drinking water, wastewater and other related services to approximately 16 million people in 35 states, as well as Ontario and Manitoba, Canada. More information can be found by visiting www.amwater.com.

Contacts:

New Jersey American Water
Peter A. Eschbach, 856-782-2316
peter.eschbach@amwater.com
www.newjerseyamwater.com

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