New Jersey American Water to accelerate water infrastructure renewal

October 2012, Vol. 67 No. 10
The New Jersey capitol. Image: J. Stephen Conn.

New Jersey American Water typically spends about $150 million every year on capital projects. Approximately $40 million of that is spent updating the pipes, pumps and valves that make up its nearly 9,000 miles of underground infrastructure.

However, as part of a new distribution system improvement program created recently by the New Jersey Board of Public Utilities, New Jersey American Water has submitted a foundational filing that, if approved, will result in more than 400 infrastructure projects across the state, representing an investment of more than $140 million and more than 900 construction jobs over the next 24 months.

The company’s foundational filing includes an engineering evaluation of the distribution system that discusses the need for accelerating the work, identifies issues the company faces in its distribution system, and actions being taken to extend the life of assets. The hundreds of proposed projects in New Jersey American Water’s filing range from a $5 million replacement of 1900s-era cast iron mains in Linden to a $13,000 replacement of a 2-inch diameter pipe section in Cherry Hill.

“This accelerated effort, which will be reviewed by BPU staff and the Division of Rate Counsel, will help address the EPA’s concern related to aging infrastructure and future compliance with the Safe Drinking Water Act,” said Suzanne Chiavari, vice president of Engineering at New Jersey American Water. “It will also allow us to work on necessary infrastructure upgrades and replacements at reasonable costs based on a replacement plan that bids the work, allowing the contractor more flexibility as to timing, which significantly lowers the cost, as compared to emergency replacements which are very expensive and disruptive to the communities we serve.”

The new program to accelerate renewal of the state’s aging water infrastructure was developed by the BPU following a lengthy public stakeholder process that lasted almost two years. The program’s infrastructure projects are funded through a Distribution System Improvement Charge that will appear as a separate item on customers’ bills. As filed, the initial DSIC for the BPU approved projects in New Jersey American Water’s foundational filing would go into effect before the summer of 2013.