Somerville Sewer System Sold For $7 Million To NJ American Water

SOMERVILLE, NJ — New Jersey American Water has signed an agreement to buy Somerville's municipally-owned wastewater collection system for $7 million, the water company announced Monday.

The agreement for the system, which serves around 3,800 customers, follows a voter referendum that took place in November 2022, which passed with 75 percent of the voters approving the sale of the system to New Jersey American Water.

As part of the agreement and with the approval from the New Jersey Board of Public Utilities (NJ BPU), New Jersey American Water will invest a minimum of $9.5 million in sewer system improvements in the 10 years after acquisition.

In addition, current sewer rates will be held for two years following the closing and then there will be no more than a 3 percent increase annually for the next three years, and then no more than a 4 percent increase annually for the following two years.

"New Jersey American Water has the expertise, equipment, manpower, and financial capability needed to maintain and improve this important part of our town’s aging infrastructure," said Somerville Mayor Dennis Sullivan. "With private ownership of the system, the borough will eliminate the need for significant rate increases going forward and borrowing money for future improvements will end. Somerville will then be able to fund other needed projects, the sewer system will be maintained and improved on a consistent basis, and sewer rates will remain stable."

New Jersey American Water anticipates completing the acquisition in the second half of 2023, pending approval from the NJ BPU.

"I want to thank the elected officials and residents of Somerville for entrusting us to manage and improve their sewer utility and help protect the town and the environment from the many risks associated with running a sewer collection system," said Mark McDonough, president of New Jersey American Water. "Providing water and wastewater service is all we do, and as Somerville’s longtime water company, we are deeply committed to making the needed improvements to provide the community with sewer service that is as safe, reliable and affordable as the water service we provide."