Public Meeting to Address Proposed Rate Hike on Water Usage

New Jersey American Water, the largest investor-owned water utility in the state, submitted an application to the New Jersey Board of Public Utilities (BPU) to increase the rates it charges municipalities, raising the average resident's monthly water bill by about $7.10. The application comes in the wake of a 15.2 percent rate increase in December 2008. If approved, the rate hike will apply to water usage at fire hydrants, businesses' fire suppression systems and residential water pipes, NJAW said.

The Scotch Plains and Fanwood councils have expressed firm opposition to the application. Representatives of the two councils will attend a public hearing tonight at 7:30 at the Westfield Public Library to speak-out against the proposal. Residents are encouraged to attend.

"This money is coming from the taxpayer's pocket," said Dominick Bratti, deputy mayor of Scotch Plains, who will speak at the meeting tonight. "We want the water company to be fiscally responsible with our money."

An NJAW spokesman said that the rate hike will pay for upgrades the company has already made to its infrastructure and facilities. "We're asking to recover what we invested," Richard Barnes, external affairs manager of NJAW, said in a telephone interview (all interviews for this piece were conducted by phone). "This is not money to spend going forward." NJAW invested $251 million in the repairs and upgrades, according to a press release the company distributed April 9.

Bratti argued, however, that the company should have taken these costs into consideration before investing in the infrastructure projects. "We can't continue to operate thinking there's more money in the pot," he said.

Fanwood Borough Clerk Eleanor McGovern agreed. She said that it was "unfair" that the company was requesting a rate hike, even as municipalities were struggling to cope with the state's new 2 percent property tax cap. "We are asking them to look at the application before them and look at our restrictions," McGovern said. 

"We already pay thousands and thousands and thousands of dollars, whether we use [the water] or not," Fanwood Borough Councilwoman Katherine Mitchell said at an Aug. 10 council meeting. The rate hike would essentially force municipalities to make deep cuts elsewhere to both pay for the hike and keep taxes under the cap, council members said.

John Bigelow, president of NJAW, argued in an April 9 press release that "water remains one of the lowest utility bills for a household, and our customers will continue to pay less than a penny a gallon for water."

A report by Food and Water Watch, a non-profit policy, advocacy and research group, however found that NJAW has raised its rates 11 times in 20 years. The group's study examined average homes that consumed 7,000 gallons of water per month, and found that the annual bill amounted to $518.17. That bill would increase to about $680 per year if the 13.6 percent increase is approved by the BPU, which regulates the operations of NJAW.

"We're looking for the water company to do as we have done as a municipality," said Bratti. "Look behind the payments we have to make, understand the cost and be cognizant of our fiscal needs." If the request is approved by the BPU, officials said that they will likely take effect in the next budget.