Company Is Keeping Its Promise On Water Prices In South Orange, Officials Say

SOUTH ORANGE, NJ — The deal still stands, South Orange officials say.

Last week, village administrators gave an update about South Orange’s agreement to sell its water system to New Jersey American Water (NJAW), which was completed in October 2025.

The agreement included five years of “rate stabilization,” with no rate increase for the first two years after the sale. Water bills will be allowed to go up 3 percent in the third, fourth and fifth years.

It’s a deal that is still in place, officials say.

According to a statement from the township, administrators have been working with NJAW to review current water billing practices and confirm alignment with the terms of the approved sales agreement.

The review was sparked by concerns from local residents.

After reviewing documentation, village administrators have concluded that the current billing structure is “financially equivalent” to the methodology previously used when South Orange owned and operated the water system.

Village officials said there have been some “necessary conversions” that were part of the transition:

• Billing Frequency - Transition from quarterly billing to monthly billing.
• Measurement Units - Water usage and billing converted from hundred cubic feet (CCF) to hundred gallons (CGL).
• Usage Rate Conversion - The prior rate of $8.00 per CCF has been converted to $1.06952 per CGL. Since one cubic foot of water contains 7.48052 gallons, these rates are equivalent.
• Minimum Charge Conversion - The former $50 minimum quarterly charge has been converted to a 16 CGL monthly usage allowance/reduction. At $1.06952 per CGL, this represents a $17.11 monthly usage charge reduction, equating to $51.33 per quarter — more than offsetting the Village’s $50 minimum charge.
• Lead Service Line Replacement Charge - Addition of a charge approved by the New Jersey Board of Public Utilities to fund NJAW’s mandated lead service line replacement efforts.

“We take inquiries from residents very seriously, and I understand that these types of conversions can be confusing,” Mayor Sheena Collum said.

Collum – who supported the sale of the water system to NJAW – said she is confident that the terms approved by voters are being upheld.

“To date, NJAW has been a strong partner throughout this transition,” Collum said.

South Orange residents with questions about their water bills can contact NewJersey.Customer.Advocacy@amwater.com or 1-800-272-1325.

PRIVATIZING SOUTH ORANGE’S WATER

The privatization of South Orange’s water system didn’t come without controversy.

Supporters said the deal will help South Orange dodge some costly upcoming repairs, including the state-mandated replacement of lead service pipes. They said the sale won’t negatively impact water rates, adding that NJAW is able to provide better service – with less of a headache for the town.

Critics argued that the deal will increase costs for homeowners and businesses over the long term – especially for low-income customers – while selling off a “precious public resource” to a for-profit company that is only interested in its own bottom line.

A municipal task force in South Orange was given the job of taking a look at the proposal in September 2022. Read the full report here.

The sale required approval from local voters, who cast ballots via a public referendum in the 2024 election. A total of 4,779 people voted “yes” (61.94 percent) and 2,937 voted “no” (38.06 percent).

• Related: South Orange Privatizes Its Water System, $19M Sale Finalized
• Related: New Jersey Towns Are Taking Water, Sewer Privatization To The Polls
• Related: Lead Pipes In South Orange: NJAW Begins State-Mandated Replacements

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