Wednesday, August 31, 2011

NJ eyes faster payback for water utilities that make infrastructure upgrades

The state is spelling out details of a proposal that will allow water utilities to recover costs for improving their water mains, hydrants and other infrastructure more quickly from customers without as much regulatory scrutiny.

The proposal, in the works for the past several months, would address a priority of Board of Public Utilities (BPU) President Lee Solomon, who has often said that the next big crisis facing New Jersey will be the cost of upgrading its aging water infrastructure.

With New Jersey facing as much $20 billion to repair its water and wastewater infrastructure, the streamlined payment mechanism is seen as a way of prodding water companies to speed up much needed repairs. If upgrades are done sooner rather than later, the long-term costs to ratepayers will be much less, according to advocates of the proposal.

The proposal that the New Jersey BPU is weighing would allow water utilities to pass along to their customers the cost of routine improvements such as water main replacements. It's been tried in Pennsylvania, where customers pay up to 3.20 per month in addition to their regular water charges.

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