NJ American Water’s New START Program May Create Up to 2,000 Jobs

New Jersey American Water President Cheryl Norton announced a new program that proposes to accelerate capital investment in water and wastewater infrastructure while creating and/or sustaining thousands of jobs. Solutions Today and Reinvesting Tomorrow (START), consists of several distinct proposed pieces.

Norton announced the details of the program in testimony before the Assembly Special Committee on Infrastructure and Natural Resources. New Jersey American Water envisions START as 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.

“What we are proposing is an acceleration in capital investment in water and wastewater infrastructure that can result in the improvement of those systems and the creation of thousands of jobs,” says Norton. “We feel that our proposed START program can, and will, make a difference, as together we fight this public health emergency and its economic impact, while continuing to provide the citizens of New Jersey with clean, reliable drinking water and environmentally safe wastewater services.”

START contains several proposed components, which include:

Water and Wastewater Infrastructure Investment Program (WWIIP)

This is a new proposal for water and wastewater utilities in New Jersey (requiring legislative or regulatory approval) which would speed up capital investment in water and wastewater systems while sustaining and creating jobs, but its framework is not new to the water/wastewater industry.

Projects under WWIIP must be on nonrevenue producing assets and must fall into certain categories like existing Distribution System Improvement Charge (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.

WWIIP could generate between $100 million to $150 million in new capital investments and the creation of 1,500 to 2,000 jobs.

Distribution System Improvement Charge (DSIC) Expansion

Currently, under New Jersey law, water utilities can only get recovery through DSIC on mostly underground distribution system assets (pipes, etc.). New Jersey American Water is proposing to expand the current DSIC program to include the replacement of above ground distribution system assets (meters, booster stations, storage tanks, etc.).

There currently is a 5 percent cap on what New Jersey American Water can recover under DSIC. New Jersey American Water is proposing to raise that cap to 10 percent. By raising that cap and allowing DSIC to apply to above ground assets, an additional $50 million to $75 million in annual capital investment could be generated. That investment would sustain or create over 500 jobs.

DSIC expansion is contingent on the result of the WWIIP proposal. If WWIIP is approved, this proposed DSIC expansion would no longer be necessary.

Accelerate the Wastewater System Improvement Charge (WSIC)

This mechanism is similar to DSIC but covers wastewater collection system assets rather than underground distribution system assets. Currently pending before the Board of Public Utilities, approval of this charge could create between $6 million and $8 million of annual investment along with approximately 150 jobs.

Like the DSIC expansion, this is also contingent on the result of the WWIIP proposal. If WWIIP is approved, this proposed change would no longer be necessary.

Lead Service Line Replacement Legislation (A1544)

This legislation would allow for water utilities to receive full cost recovery for the replacement of the customer-owned portion of a lead service line (street to the home) in addition to the company owned side. New Jersey American Water’s goal is to reduce lead in drinking water through the proactive elimination of lead service lines and ongoing optimization of water treatment to reduce corrosion of plumbing materials that may contain lead.

Replacing lead service lines in conjunction with main replacements or relocations is not only a cost-effective, efficient, and responsible way to continue infrastructure renewal programs, it also best addresses the health and safety concerns associated with partial lead service line replacements. This is an important piece of helping to reduce New Jerseyans’ potential exposure to lead.

H2O/Affordability Programs

For nearly a decade, New Jersey American Water has been assisting low-income water customers who qualify through its H2O Help to Others Program, which is administered by New Jersey Shares. Customers who qualify may receive a grant of up to $500 to help pay their water bill for indoor water use only.

New Jersey American Water has implemented new measures aimed at increasing participation in the program by making it easier to apply and qualify. These include:

  • Increased eligibility for customers (including those impacted by COVID-19)
  • Temporarily waiving the $100 payment requirement through Dec. 31, 2020 to receive the H2O grant
  • Temporarily waiving the restriction of receiving a grant only every three years through Dec. 31, 2020 for any customer that has not yet received a grant in 2020 to date
  • Temporarily waiving the requirement of no broken payment arrangements within the past year through Dec. 31, 2020
  • Temporarily making both programs available to landlords who don’t live at the property and meters that are shared by more than one owner (both currently excluded from H2O)
  • Changing the income recertification requirement for the Service Charge discount from two years to one year for customers receiving unemployment benefits who apply for assistance between July 1, 2020-Dec. 31, 2020
  • Expanding the DSIC discount to those who qualify for the Service Charge discount, for customers who apply between July 1, 2020-Dec. 31, 2020

Expand Supplier Diversity Programs

American Water’s Supplier Diversity Program is centered on the fact that the company views supplier diversity as a business imperative, not just the “right thing to do.” American Water strives to work with suppliers that represent the diverse backgrounds of its customer base.

New Jersey American Water is committed to strengthening the economy and improving its communities, and supplier diversity plays a critical role in this. The company realizes that small, minority-owned, women-owned and other diverse businesses play a vital role in the economic well-being of our communities. Diverse suppliers are the fastest growing business segment in the country, offering innovation, customer-focused solutions.

Through the proposed START initiative, New Jersey American Water will continue to strengthen its Supplier Diversity efforts through increased partnerships with diverse businesses in New Jersey. Details of the program are still being developed and will be announced in the near future.

Develop A New Workforce Employment Initiative (Apprentice Program)

The water industry over the next five years faces an employee work shortage as “new” employees into the water industry are not evolving. It is difficult to obtain water/wastewater treatment licenses, generally taking up to 10 years. Many people, especially young adults, do not know about the well-paying jobs that are attainable in the water industry.

New Jersey American Water wants to develop an apprentice program to help address this issue. We are working with the Governor’s Office/Department of Labor and the NJ Vocational-Technical Schools Association to develop such an initiative and will be announcing further details in the near future.

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