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BPU Tool Helps Water Companies Speed Infrastructure Investments

Friday, January 20, 2017   (0 Comments)
Share | 01/20/17

The state is proposing to retain a program that allows water companies to invest in their aging infrastructure more quickly — without lengthy regulatory review — a mechanism viewed as accelerating needed repairs in systems many decades old. In a proposal published earlier this week, the state Board of Public Utilities essentially decided to readopt the rule with minor technical changes while declining to expand the program to allow spending on a wider range of projects as advocated by some utilities.

The proposal, the subject of months of discussion among the agency’s staff and the industry, occurs at a time when policymakers are focusing increased attention on losses suffered by water companies, which range between 20 percent and 30 percent by some projections.  A new study prepared for the Natural Resources Defense Council released Tuesday found apparent losses for all New Jersey water utilities are likely to amount to 130 million gallons a day, much of which could be saved.

How big is New Jersey’s water problem? According to the U.S. Environmental Protection Agency, the state needs to spend at least $8 billion over the next couple of decades to repair its drinking-water infrastructure. The cost of upgrading its wastewater systems is tabbed at around $20 billion. The state adopted its so-called distribution-system improvement charge in 2011 as a way of incenting water companies to invest more quickly in needed upgrades to their systems. Under the program, modeled after neighboring states, a utility can spend up to 5 percent of its total revenues on upgrades without first receiving regulatory approval, a time-consuming and sometimes costly process.

“We are happy the board is continuing the program,’’ said Andrew Hendry, president of the New Jersey Utilities Association, an industry trade group, which sought to increase the 5 percent cap. They also sought to expand the program to include wastewater systems, but that option was rejected by the agency. “Obviously, there is also a lot of work to be done on the wastewater side,’’ Hendry noted.


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