New Jersey American Water Delran treatment plant. Credit: Matt Skoufalos.

Water and wastewater rates for New Jersey American Water (NJAW) customers are set to increase this month.

Starting September 15, communities served by the largest water provider in the state — including 23 Camden County municipalities comprising some 78,000 people — will pay more per gallon on average for their water usage.

The increase was approved Wednesday by the New Jersey Board of Public Utilities (BPU) as a settlement between NJAW and the New Jersey Division of the Rate Counsel.

The average NJAW residential customer with a 5/8-inch meter (the majority of its customers) uses 5,642 gallons per month, the company said.

The rate increase will account for about $5.32 more per month, on average; customers in Haddonfield, which sold its water and sewer system to NJAW 10 years ago, will see their bills increase about $7.87 per month on average, the company said.

The average NJAW wastewater customers’ bills will increase about $5.68 per month.

That takes the tariff schedule for general metered service for the majority of Camden County customers up from $7.7752 per 1,000 gallons to $8.8724 per 1,000 gallons, as well as a $2.80-per-month fixed charge increase for 5/8-inch metered water service.

Customers’ bills also include additional charges for infrastructure repairs and system improvements. The full, adjusted rate schedule is available here.

NJAW says it will net about $79.5 million in annualized revenues from the increase, which it will use to offset $1.3 billion in planned and completed infrastructure investments in its water treatment and distribution systems.

In January, the company requested a rate increase that would have generated $161.7 million in annualized revenues. The settlement reduces that total amount by about half.

New Jersey American Water usually files for a base rate adjustment every two to three years, typically to recoup the cost of its investment in infrastructure repairs, said Denise V. Free, its Senior Director of Communications & External Affairs.

In its February filing, which suspended any rate increases until June 2024, BPU reported that NJAW also blamed economic conditions for the cost of its repairs.

“The Company asserted that, in addition to operations and maintenance expenses driven by recent high levels of inflation and supply chain disruptions, its cost of capital increased due to the rise in interest rates driven by the Federal Reserve Board,” BPU officials wrote.

NJAW invests about $500 million annually into infrastructure upgrades, Free said, mostly to replace pipes, pumps, and booster systems that have outlived their useful lives. The work is done on a preventive maintenance schedule, which is designed to avoid the service interruptions that can come with major breaks.

Rate increases for New Jersey American Water customers. Credit: NJAW.

“Locally, in 2023, we invested approximately $76.6 million in improvements to the systems serving our South Operating Area,” NJAW noted in a marketing document accompanying the rate increase announcement.

The utility said that such work includes $46.3 million worth of “new, replaced, and rehabilitated water mains, hydrants and valves,” $12.4 million in new and replaced meters, $10.6 million in sewer system upgrades, and $7.4 million in upgrades to its water treatment plant.

“These projects help to provide continued water quality, service reliability and fire protection for the communities we serve,” the notice reads. “This level of investment contributes to the creation of close to 19,500 jobs across the state.”

NJAW also added two new Universal Affordability Rate (UAR) Schedules that discount water and wastewater fees for customers who may struggle to meet their utility costs. The cost of the program is covered by existing rates, and there is no separate surcharge passed on to customers for it.

The new UAR schedules facilitate income-based discounts for qualifying NJAW customers. These discounts can range from 15 to 60 percent off the bill for water and wastewater services for customers at or below 200 percent of the federal poverty level.

For more about the program and how to apply through its administrator, NJ SHARES, visit the NJAW H2O Program page.

CORRECTION: An earlier version of this story stated the price increase of 1.43¢ per gallon. This was incorrectly calculated, and this story has been appended with the revised rate information above.