Rate Hike Approved For New Jersey American Water Customers

NEW JERSEY — State officials have approved a rate increase for New Jersey American Water (NJAW) that will result in a slight price hike for its customers.

On Wednesday, the New Jersey Board of Public Utilities (BPU) approved a settlement regarding new water and wastewater rates for NJAW. The new rates will become effective on Sept. 15.

The average bill for most water customers with a 5/8-inch meter (using 5,642 gallons per month) will increase from $75.64 to $80.96 – about $5.32 per month. The bill for an average wastewater customer will increase about $5.68 per month, depending on the service area.

The rate hikes will raise about $79.5 million for the company, officials said.

Customers will receive information about the new rates in their next bill. Information will also be available on the company’s website or by calling 800-272-1325.

Not sure if you're in the company's service area? See a list of towns and cities here.

NJAW filed its request to raise rates on Jan. 19, telling state officials that the need was primarily driven by more than $1.3 billion in infrastructure investments for treatment system and distribution upgrades that it has made since its last rate filing.

The work included:

• replacement and rehabilitation of nearly 176 miles of aging water mains
• investments in treatment facilities to comply with regulations for PFAS
• improvements to surface water treatment facilities
• replacement of aging, critical, large-diameter transmission mains and several large-scale pipeline replacement projects to improve system reliability
• replacement of thousands of utility-owned lead and galvanized service lines
• advanced leak detection technology
• replacement or upgrades to improve reliability and efficiency at dozens of wells
• pumping stations and other critical facilities
• sewer system upgrades to meet environmental regulations

How does the BPU determine if a provider’s rate increases are appropriate? According to the agency’s website:

“As part of the pending rate case, we submitted detailed financial data documenting the need for the company to adjust rates. The BPU, Division of Rate Counsel and other parties then scrutinize the information received from our company in an open and thorough process. Based on this, the BPU decides whether it will grant all, some or none of the requested changes in rates. In the end, the BPU, with significant input from the Division of Rate Counsel and a recommendation from an administrative law judge, determines the final rates to be implemented by New Jersey American Water.”

The company’s proposed Universal Affordability Tariff was also approved as part of the latest rate filing, and will be incorporated into the company’s H2O Help to Others assistance program. The new tariff will provide discounts on both the monthly fixed service charge and the monthly usage charge for income-eligible customers. Learn more here.

New Jersey American Water, a subsidiary of American Water, is the largest regulated water utility in the state. It provides water and/or wastewater services to about 2.9 million people. See its 2023 annual report to the BPU here.

“In the first six months of 2024, we invested $1.4 billion with the majority dedicated to needed infrastructure improvements to better serve our customers,” American Water president and CEO Susan Hardwick said in a recent earnings report.

“This included $119 million of acquisitions closed in Illinois, New Jersey and Virginia, all of which are included in their respective current rate cases,” Hardwick said.

“The company delivered solid results for the first half of the year,” Hardwick added. “While results are relatively flat year over year, that is what we expected as we will see the results of our recent regulatory outcomes in the latter part of this year.”

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