NJ Allocates Over $1 Billion in Loans for Sandy-Related Water, Sewer Repairs

Tom Johnson | August 15, 2014 | Energy & Environment
Federal, state funds will be distributed for 235 projects to fix, upgrade infrastructure

When wastewater treatment plants lost power during Hurricane Sandy, they dumped untreated sewage into NJ's waterways.
The state is ramping up its spending big-time to help New Jersey’s water and sewer utilities recover from the damages from Hurricane Sandy.

In a bill signed by Gov. Chris Christie last Friday, the state authorized approximately $1.3 billion in low- and no-interest loans to 235 projects, most involving costs involved in dealing with storm damages to water infrastructure.

Sandy damaged 400 water systems and 94 wastewater treatment plants, many of which were left without power, often with disastrous consequences – hundreds of millions of gallons spilled into the state’s waterways, leading to boil-water advisories in many communities.

The money being allocated this year by the New Jersey Environmental Infrastructure Trust, the financing mechanism set up the state to help fund improvements to sewer plants and water supply facilities, is well beyond the allocation of a few hundred-million dollars in past years.

Seventy percent of the money is coming from the federal government, with the rest matched by the state, according to Larry Ragonese, a spokesman for the New Jersey Department of Environmental Protection.

“It’s definitely good that the money is out on the streets,’’ said Chris Sturm, senior director of policy for New Jersey Future, an organization that has been pressing the state to invest in more improvements to its water infrastructure.

The money was allocated under a bill, [link:
http://www.njleg.state.nj.us/2014/Bills/S2500/2122_I1.HTM|S-2122], approved by the Legislature without any negative votes in mid-June and signed into law by Gov. Chris Christie earlier this month.

Many of the state’s largest wastewater facilities and water-supply systems are beneficiaries, of the latest allocations by the trust fund.

For instance, the Jersey City Municipal Utilities Authority could receive up to $148.4 million and the Middlesex County Utilities Authority could get up to $130.8 million from the program. Major water systems also are in line for funding, including the North Jersey District Supply Commission ($41.7 million), the New Jersey-American Water Company ($31.5 million), and the Passaic Valley Water Commission ($22.3 million).

After Christie signed the bill, Moody’s Investor Service issued a brief comment saying that the bill is a “credit positive” for municipal utilities in the state. Some of the utilities will use the loans from the state to bridge the delay in receiving reimbursements from the Federal Emergency Management Agency, according to Moody’s.

During Hurricane Sandy, the state suffered an estimated $2.6 billion worth of damage to its water and sewer infrastructure, according to Moody’s. That’s on top of costs are already associated with an aging water and wastewater infrastructure, an expense that could top $40 billion over the next two to three decades, according to recent studies.

“These all are actions to make the water infrastructure more resilient to storms like Sandy and future storms due to climate change,’’ said Rob Moore, a senior policy for water impact programs for the Natural Resources Defense Council. “If we don’t make these investments, we’re not spending the money very wisely.’’

Jeff Tittel, director of the New Jersey Sierra Club, had a different perspective. He argued that the state failed to account for rising sea levels in awarding the loans.

“A lot of this money could be wasted because it could be washed out to sea,’’ he said.