Access to safe and affordable water in New Jersey is facing a potential threat as Assembly Bill No. 4791, sponsored by Assemblyman James J. Kennedy, is causing a stir among environmentalists and consumer advocates.
The legislation, known as the “Resiliency and Environmental System Investment Charge Program” (RESIC), is being criticized as a ‘corporate water grab,’ empowering for-profit corporations like New Jersey American Water to raise public water rates without the usual state oversight.
The Senate Budget and Appropriations Committee reported the measure favorably with committee amendments on January 4, 2024. If passed, the bill could have significant implications for the affordability and accessibility of water for New Jersey residents.
According to Kate Delany, a senior organizer with Food and Water Watch, the average water rates charged by private water companies in New Jersey are already 79% higher than rates charged by publicly controlled water systems.
Delany said the bill would give private companies the authority to increase rates without the existing consumer protections mandated by current state law.
Environmentalists, including Lisa McCormick, argue that water is a fundamental human right and should not be exploited for corporate profits.
“Our water should not be a cash cow for billion-dollar corporations,” says McCormick. “As a growing population stresses the world’s food and water supplies, corporations and investors in wealthy countries are buying up hydrological resources.”
She contends that the bill would allow private water companies to raise rates and evade proper oversight, enabling them to bill ratepayers for future projects that haven’t even been undertaken.
Assembly Bill No. 4791 establishes the RESIC program, providing a regulatory mechanism for water and wastewater utilities to recover costs associated with certain non-revenue-producing utility system components.
These components aim to enhance water and wastewater system resiliency, environmental compliance, safety, and public health. However, critics argue that this could lead to unregulated rate hikes and undermine consumer protections.
The bill authorizes utilities to petition the Board of Public Utilities (BPU) for RESIC activities, allowing them to recover costs related to the replacement of treatment media and infrastructure improvements.
However, the total revenues recovered through the RESIC rate would be subject to a cap based on a percentage of the utility’s total annual revenue.
Committee amendments to the bill include changes to the RESIC-cap percentages, clarifying the types of treatment media replacement costs that may be recovered through the RESIC rate.
The fiscal impact statement suggests potential annual expenditure increases for certain state and local entities, along with school districts serviced by participating water or wastewater utilities.
As the bill advances through the legislative process, the debate intensifies, with environmentalists and consumer advocates urging lawmakers to prioritize the protection of water as a public resource rather than a source of corporate profits.