By Ry Rivard, Politico
Four months after New Jersey Gov. Phil Murphy signed a law allowing a new kind of surcharge on water bills, New Jersey American Water is asking for regulatory approval to raise the typical customer’s bill by $2.50 a month. The new law created the Resiliency and Environmental System Investment Charge Program, which allows private water and sewer companies to request rate increases to pay for system resiliency, environmental compliance, safety, and public health expenses.
The charges, which are capped by law at 5 percent of a utility’s total annual revenues, were criticized by the state’s ratepayer watchdog because they can be requested outside of the typical rate case.
New Jersey American, the state’s largest water provider apparently is the first utility to request an increase under the new law in a mid-April filing that is now pending with the Board of Public Utilities. The surcharge would be phased in.
In total, the increase would generate $205 million for the company through 2027 for upgrades that will, among other things, help cope with emerging contaminants like PFAS, which are subject to new and more stringent federal regulations, and build a resilient system to deal with “climate variability.”
“This regulatory tool enables utilities to invest more quickly to comply with changing environmental regulations while spreading the costs into smaller, incremental charges,” New Jersey American spokesperson Denise Free said in a statement.
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