VOORHEES, NJ — Beginning June 15, New Jersey American Water is implementing provisional rates for water and wastewater service while the New Jersey Board of Public Utilities reviews the company’s rate change request. New Jersey American Water’s rate request, which was filed Sept. 15, 2017, was driven by more than $868 million in needed investment in treatment and distribution system upgrades statewide since the company’s last rate increase in 2015, according to a recent press release from the company.
The provisional rates, which will generate approximately $75 million in additional annual revenue, will increase customer charges in each service area by approximately 12.3 percent, excluding surcharges. As a result, the water bill for the average residential customer using 6,000 gallons of water a month will increase approximately $5.90 per month, and the average residential wastewater bill will increase approximately $4.12 per month.
These provisional rates are temporary and will remain in effect until the BPU renders its final decision on the company’s rate case, which is expected later in the year. If the approved rates are lower than the provisional rates, the company will refund, with interest, any amount billed in excess of the approved rates. If the approved rates are higher than the provisional rates, there will be no retroactive adjustment to customer bills. Final approved rates may not exceed the $117 million — inclusive of tax law changes — requested by the company in its filing.
“Our rate request is based on the more than $868 million in infrastructure upgrades, including over 1 million feet of water main, to ensure reliable service to 2.7 million New Jersey residents that count on us every day,” NJAW President Deborah Degillio said. “Rates are based on the true cost of water and wastewater service. We continue to work hard to control our costs by operating as efficiently as possible to control our operating expenses.” Degillio further noted that increases in operating expenses are not a driver of this rate increase.
NJAW customers also recently had a rate decrease as a result of the Tax Cuts and Jobs Act. On April 1, most customer water rates were reduced by 5.9 percent. The water bill for the average residential customer using 6,000 gallons a month decreased approximately $3.36 per month, and the average residential wastewater bill decreased between $1.49 and $5.81 per month, depending on service area. The BPU is continuing its review of the overall impact of the new tax act, and further rate adjustments are anticipated in the coming months.