NJ American Water Files for New Rates with BPU

New Jersey American Water Seeks New Rates and Conservation Programs from BPU
New programs to help customers save money and spur economic development
CHERRY HILL, N.J., April 9, 2010 /PRNewswire via COMTEX News Network/ — New Jersey American Water announced today that it has filed for new rates with the New Jersey Board of Public Utilities, which will increase the average customer’s monthly water bill by $7.10 or 23 cents per day. As part of this rate filing, the company has proposed implementing innovative residential water conservation programs, expanding assistance to low income customers, and creating new rate structures that would encourage conservation and generate economic activity in New Jersey.
Since its last rate filing, New Jersey American Water has spent approximately $251 million in capital improvements, replacing miles of aging water mains, and upgrading its water treatment facilities, storage tanks, wells, and pumping stations to improve water quality, service reliability, and fire protection. The cost of increased expenses such as labor, fuel, energy, taxes, and property and liability insurance are part of the company’s rate request.
“New Jersey American Water is confronting the serious need to replace aging infrastructure and deliver high-quality, reliable water service to the 2.5 million people we serve in New Jersey,” said John Bigelow, president of New Jersey American Water. “Rate increases are necessary as we continue to make prudent investments in our water systems to maintain and improve service. 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.”
Bigelow continued, “We hope that with this filing, we will be able to incorporate new programs that highlight the importance of wise water use and raise awareness of water as a precious natural resource.”
To increase understanding among its customers about the value of water, New Jersey American Water has added a conservation component to its rate filing. An outgrowth of the company’s “Save Blue, Save Green” (save water, save money) initiative, the proposed conservation program includes:
* A do-it-yourself online water audit tool to help customers identify ways to use water more efficiently based on their water-use habits.
* A rebate program to encourage customers to purchase water-saving appliances and fixtures
* Web-based tools for customer education, and ease of obtaining and submitting rebate applications and purchasing water-saver kits
Additionally, the company will focus conservation efforts to help customers – who are eligible for New Jersey American Water’s Low Income Payment Program (LIPP) – save water. Those customers could receive a comprehensive telephone audit of water use and potential savings opportunities; free water-saving retrofit kits; discounted leak repairs and plumbing; and plumbing assistance to install water-efficient devices.
Another aspect of the program would tie conservation to a tiered rate structure. A proposed pilot program for residential customers in portions of Monmouth County would implement a three-tier increasing block water rate structure on a seasonal basis from May through September. The less water customers use, the less they would pay. The first block applies to the first 4,000 gallons per month, the second block applies to the next 6,000 gallons per month, and the third block applies to usage above 10,000 gallons per month. The cost per gallon would increase with each rate block. The typical New Jersey residential household uses 7,000 gallons of water each month. This program would allow New Jersey American Water to send the appropriate pricing signals to customers regarding their water usage, as well as determine whether these price signals have an impact on customer usage.
The rate filing includes a provision to incentivize new businesses to invest in New Jersey, both creating jobs and stimulating the state’s economy. With the proposed Economic Development Rate, New Jersey American Water will offer lower rates for a set period of time to new commercial or industrial customers who establish their business within the company’s service territory. This concept is similar to economic development tariffs used by other New Jersey utilities. The company will work with state agencies and other utilities to package and create proposals that will stimulate economic growth and jobs.
Rates will remain unchanged until this request undergoes extensive public scrutiny by the New Jersey Board of Public Utilities, the New Jersey Division of Rate Counsel, and an Administrative Law Judge. This scrutiny will include numerous interrogatories, public hearings and evidentiary hearings. This process, based on prior requests, can take a minimum of nine months.
The increased rates proposed in the rate petition are a request only. The New Jersey Board of Public Utilities will make the final decision regarding the actual percent of increase. Once a final decision has been made, customers will receive information in the mail and at www.newjerseyamwater.com explaining the new rates.
New Jersey American Water, a wholly owned subsidiary of American Water (NYSE: AWK), is the largest investor-owned water utility in the state, providing high-quality and reliable water and/or wastewater services to approximately 2.5 million people. Founded in 1886, American Water is the largest investor-owned U.S. water and wastewater utility company. With headquarters in Voorhees, N.J., the company employs more than 7,000 dedicated professionals who provide drinking water, wastewater and other related services to approximately 16 million people in 35 states, as well as Ontario and Manitoba, Canada. More information can be found by visiting www.amwater.com.