By Greg Forester, Staff Writer
A potential 23.4-percent rate hike proposed by New Jersey American Water Co. has area municipal officials hopping mad, as the plan continues to receive consideration from the New Jersey Board of Public Utilities and other state entities.
In a petition, New Jersey American Water cited infrastructure investments and increased costs of doing business as necessitating the increase. The rate petition filed by the company states that the increase would generate around $120 million in new revenues, designed to offset around $350 million of recent infrastructure improvements.
”We asked the Board of Public Utilities for what we think is prudent,” said Lendel Jones, a spokeswoman for New Jersey American Water. “It’s based on the capital improvements that we have done.”
Local officials disagree with that assessment, with many aligned against the rate hike.
The anger stems from the magnitude of the proposal. If granted in full, it would hand the average customer in the Princeton area a $39.51 increase per quarter, raising the current average bill from $106.20 up to $145.71.
Princeton Borough Administrator Bob Bruschi said the borough government regarded all water rate increases as problematic because of a perception that water companies request rate hikes that reflect not only past costs, but future costs.
”The fact is that all of this stuff that goes to BPU ends up being negotiated, and we still end up with a number higher than what’s reasonable,” Mr. Bruschi said.
In reflecting on the rate proposal, West Windsor Mayor Shing-Fu Hsueh cited his experience with the state’s water supply system. Mayor Hsueh worked in the state government for years, before entering elective office.
”As a professional in this area, it’s unacceptable,” said Mayor Hsueh of the proposal. “It is really too high, the way I see it.”
The Township Council has taken a similar position. A resolution passed by West Windsor Council called the rate hike “another assault on the working families and retirees of West Windsor and our state. …”
Plainsboro Township Administrator Robert Sheehan said municipal officials have been on the record against the proposal for some time, citing the magnitude of the rate hike, along with the current economic climate and fiscal woes facing most municipalities.
”It is certainly a matter we’re concerned about,” Mr. Sheehan said.
The Montgomery Township Committee has already passed a resolution in protest of the rate hike, according to Mayor Cecilia Birge.
She labeled the increase as “way too high” and beyond any other price index that might be comparable to what has been proposed by New Jersey American Water.
”We already pay hundreds of thousands of dollars to them a year, for doing minimal work,” Ms. Birge said.
Princeton Township Administrator Jim Pascale could not be reached for comment, but meeting minutes show periodic updates on the rate hike given to the Township Committee by Township Attorney Edwin Schmierer.
The last time New Jersey American Water initiated a rate hike was in March 2006, with an initial proposal of 22.3 percent, which would have resulted in a total increase in revenue for the company of roughly $99 million, according BPU spokesman Doyal Siddell.
He said the five-member BPU eventually reached a settlement with the company that resulted in a 12.46 percent increase, which netted New Jersey American Water an additional $56 million in revenues.
BPU Commissioner Christine Bator appeared before West Windsor’s Township Council on Monday, urging residents there to attend a public hearing on the rate hike in Bridgewater, and to send written correspondence voicing their opinion of the proposal to the board.
New Jersey American Water cited large-scale infrastructure investment as the reason for the rate hike after the company spent $350 million to upgrade water facilities and piping.
”Water infrastructure has a life between of 70 and 100 years,” said company spokeswoman Lendel Jones. “Most of the current piping has been there for a very long time.”
Not included in the $350 million of infrastructure is the pending purchase of Trenton Water Works water facilities outside of the city limits.
Ms. Jones dismissed speculation by some West Windsor residents that the purchase of the Trenton facilities was driving the rate hike.
