New Jersey American Water: It's time for greater infrastructure renewal in New Jersey

CHERRY HILL, NJ, June 8, 2009 -- Some of the 20,000 to 30,000 miles of water pipelines running under New Jersey have been in the ground since the late 1880s...

• Company's VP for government affairs describes needs and challenges running under the state

CHERRY HILL, NJ, June 8, 2009 -- Some of the 20,000 to 30,000 miles of water pipelines running under New Jersey have been in the ground since the late 1880s. "That fact alone demonstrates that the time for greater infrastructure renewal is here," said Jason Gonzalez, vice president for government affairs, New Jersey American Water. Gonzalez was speaking last Tuesday to the Alliance for Action conference on utility construction and the economy.

Today's demands on water infrastructure are dramatically different than when much of the state's pipelines were installed. Improved fire protection, improved corrosion control, heavier traffic loads, among other factors dictate the need for new and/or upgraded infrastructure. "The Environmental Protection Agency recommends that water infrastructure be replaced at a rate of 0.5 to 1.5% a year, and estimates that will require as much as $10 billion in New Jersey alone," said Gonzalez. "New Jersey American Water spent $31 million last year on pipeline replacements. But to get to the levels the EPA is recommending, new ways of financing are needed."

One possible means of increasing water system investment is the Distribution System Improvement Charge (DSIC). Called a "best practice" by the National Association of Regulated Utility Commissioners, a DSIC is a mature and successful regulatory instrument designed to reduce infrastructure backlog and regulatory lag. "Infrastructure surcharges like a DSIC provide needed infrastructure replacement, create jobs, and deliver fair and timely returns on a utility's investment," said Gonzalez.

New Jersey American Water, a wholly owned subsidiary of American Water, is the largest investor-owned water utility in the state, providing high-quality and reliable water and/or wastewater services to approximately 2.5 million people.

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