EDISON – Risks of rate increases, hidden surcharges, broken promises and lack of control are some of the concerns raised by Food and Water Watch as they presented their concerns ahead of a public hearing on the proposed $811.3 million new public-private partnership with Suez North America.
Junior Romero, central New Jersey organizer for Food and Water Watch, a non-profit organization that champions for healthy food and water for all, presented his concerns before a room full of residents at Grace Reformed Church on March 11.
“We believe [the proposed partnership] is fiscally irresponsible,” he said.
Romero said for the typical New Jersey household, a privately owned water utility service costs 79 percent more than public water service, about $230 each year.
In 1997, Edison had entered into a contract with New Jersey American Water to operate and manage its water system. In 2017, the township amended the contract, which ended that year, and extended it for two years so options could be considered, including the benefits of private operation of both the water and sewer systems.
Currently, Edison operates its own municipal sewer utility, serving the entire town. The township serves approximately 12,000 water customers and 26,000 sewer customers, both residential and commercial.
Romero said since the water system in the township is already privatized, the group is consulting with its lawyers to petition to keep the sewer system in the township a public utility.
Mayor Thomas Lankey said the proposed long-term 40-year lease agreement with Suez North America, a Paramus-based water and wastewater company, will not only allow Edison to retain ownership of the water and sewer systems, but also provide significant financial benefits for the community.
The proposed agreement provides the necessary $496.5 million investments for infrastructure improvements; provides the township with a sizable “upfront payment” of $105 million, which the township will use to retire its existing debt and utilize a small portion for the design, development and construction of the long discussed new municipal community center; rate protection; and keeping the senior freeze intact.
Lankey said rate increases will be capped as they relate to an agreed upon formula expected at an average of 4 to 5 percent, which is below national average increases.
The proposed contract requires Suez to manage and operate the township’s water distribution system and sewer collection system including operations and management in accordance with a best management practices operations and technical standards manual; maintenance and operations annually of $4 million increasing with inflation over the 40 years of the contract; and billing and collection to customers of the township systems, both commercial and residential.
“This long-term lease will have Suez operating these systems and, more importantly, relieve the township of the financial burden of funding capital to these aging systems,” Lankey said. “Suez, a company with the technical experience and expertise that now serves 1.5 million people across New Jersey, will manage, maintain and make all necessary improvements to our water and sewer systems.”
Romero said the proposal with concessions are not free.
“Private companies do not donate money,” he said.
Romero provided examples of case studies his organization conducted in Bayonne and Middletown, Pennsylvania. Both municipalities entered long-term agreements with Suez and saw surcharges and rate increases.
In response to the meeting held on March 11, Lankey said the meeting was a “one-sided discussion by out-of-town special interest groups that do not have Edison’s best interests at heart.
“While we welcome the public’s feedback and input, these out-of-town special interest groups have not put any viable alternative solution forward,” he said. “The agreement we negotiated, which must be approved by the Township Council and state regulators, protects Edison residents, provides critical infrastructure investments, stabilizes rates in the long term, maintains the senior rate freeze program, and allows for Edison to maintain ownership of the systems. In addition, protections are being put in place within the contract to ensure Edison receives the benefits that have been negotiated.”
The partnership agreement is contingent upon a local public hearing and will require approvals from the Edison Township Council, the state Department of Community Affairs, the Department of Environmental Protection and the Board of Public Utilities.
Lankey said he looks forward to the public discussion of the important issue once the agreement details are finalized.
“At this point, Edison residents will be able to have all the information needed to form an opinion,” he said.
The public outreach process will begin with a public hearing at 6 p.m. on March 28 at Middlesex County College, 2600 Woodbridge Ave., Edison.