Utility president to tell Assembly committee that START program — which would require a rate hike — would help bring $150M in capital investment
There’s an $18 million upgrade to the Canal Road ozone system in Somerset County, an $8 million upgrade to the Canoe Brook Passaic River Intake Facility in Essex County and a $12 million upgrade to the Mill Lane Iron Removal Facility in Atlantic County.
These are just some of the necessary projects that are in American Water’s master plan to upgrade the water infrastructure in New Jersey. And, in addition to creating more efficient water systems, they come with the promise of jobs during a hard-hit economy.
They just need regulatory and legislative approval.
New Jersey American Water President Cheryl Norton will take a step to getting that when she testifies Thursday afternoon before the Assembly Special Committee on Infrastructure and Natural Resources.
Norton will present START, Solutions Today and Reinvesting Tomorrow, a proposal the Camden-based utility company says will accelerate capital investment in water and wastewater infrastructure while creating thousands of jobs.
The proposal will have a number of features that will boost capital investment for projects ranging from main replacements to facility enhancements and construction. And, since the company serves one of every three residents in the state — and is present in 18 counties — they will occur in every region.
Norton told ROI-NJ the investment in water infrastructure couldn’t come at a better time.
“These regulatory and legislative proposals that we’re putting forth increase the level of investment, increase the speed at which we invest and increase the creation and sustaining of jobs,” she said. “We’re looking to be a job generator.
“This whole program started as COVID started to unfold and we saw the challenges that were that we’re going to be faced in the economy going forward in the state. We started having conversations, ‘Could we put together a package that helps to put a circle around all of that, and what does that package look like?’”
In a perfect scenario, it starts with what the company is calling WWIIP — or the Water and Wastewater Infrastructure Investment Program.
Norton said projects under WWIIP — such as the ones mentioned previously — must be on non-revenue-producing assets and must fall into certain categories, such as existing DSIC-eligible projects; replacement of plant items; water main cleaning and lining; distribution, production and other infrastructure for the purpose of safety; water quality; resiliency; and environmental compliance.
Norton said the company estimates WWIIP could generate between $100 million and $150 million in capital investments and create 1,500-2,000 jobs.
The cost to the customer would be approximately $1.50 per month for the first year, which is as far out as can be estimated.
That’s where the difficulty comes in.
Norton understands any rate increase is met with resistance. And she said she understands any rate hike during financial times such as these is a tough ask. But she makes two solid points in her company’s defense.
“We want to do what’s right for the state, making the level of investment that we should be making, and doing it even faster than what we had planned, which will help bring jobs and help impact the economy. But we have to be able to recover our costs in a timely fashion in order to be able to add more capital to what we already have.”
Norton points out New Jersey American Water currently has approximately $1 billion of capital investment working in the state.
“That’s a lot of money to have out there,” she said. “And to be able to only recover a small portion of that in the short term is tough.”
Norton said the company always is looking at customer impact — and notes that increasing the H2O/Affordability Program the company already has to more customers is part of the SMART program.
“Affordability is a big piece of this plan,” she said. “But it’s a really fine balance. We know that we can’t make all the investments that we would like to make without having a negative impact on our customers. Trying to figure out that balance is really important.”
Norton said she will discuss other alternatives — programs that will bring smaller investments and fewer jobs, but at less cost.
The WWIIP program, however, is the top choice of New Jersey American Water. Norton feels it offers the best balance of fast-tracking investments in some much-needed water infrastructure projects while adding thousands of jobs at a time when the state is facing an uncertain economic future.
“START can be part of New Jersey’s economic recovery from COVID-19, putting people to work while also continuing to provide hundreds of thousands of New Jerseyans with safe and reliable water and wastewater services so they don’t have to worry about adding it to their list of current concerns,” she said.