Much-Debated Water-Infrastructure Bill Passed — with Little Fanfare

Tom Johnson | December 16, 2014 | Energy & Environment
Proponents argue that speeding sale of municipal water-supply and treatment facilities to private owners is best way to make costly repairs, upgrades

In a close vote, the Assembly yesterday approved a controversial bill that could speed up the sale and lease of water-supply facilities and wastewater treatment plants owned by municipalities to private businesses.

The bill (A-3628), approved by a 45-24-6 vote, could be taken up by the state Senate as early as Thursday. If so, it is being fast tracked for passage by lawmakers, despite stiff opposition from environmental groups, consumer advocates, and even parts of the industry sector. A similar bill is pending in the Senate.

The legislation passed without any debate, and in a departure from typical bills passed by the Assembly was not touted in any press releases usually issued by the communications office for far less inconsequential legislation, an indication of how contentious the issue is.

The aim of the bill is to help financially strapped towns make much-needed improvements to drinking-water systems and facilities that handle and dispose of sewage — costs that many communities cannot afford.

The legislation, dubbed the Water Infrastructure Protection Act, is designed to address long-neglected problems in what can be century-old drinking-water supply systems and sewage-treatment facilities. The cost of doing this across New Jersey could exceed $40 billion — far beyond the resources of either local governments or the state to address, according to the bill’s supporters.

Proponents of the bill, sponsored by Assembly Majority Leader Louis Greenwald (D-Camden), include some business interests, the New Jersey Utilities Association, New Jersey Alliance for Action and New Jersey State Chamber of Commerce.

But others, such as the state Division of Rate Counsel, argued the bill would strip away the New Jersey Board of Public Utilities’ authority to decide how much of the purchase price should be passed on to customers instead of shareholders.

Others who opposed the bill said it would allow a public referendum on an acquisition or a lease only after the municipality had approved the deal. Residents who opposed the sale could file a petition objecting to the sale, but only if they acquired 15 percent of the community to support it.

“This bill itself is bad enough,’’ said Jim Walsh, New Jersey director of Food & Water Watch, “It would remove the rights of local communities to determine what’s best when it comes to clean, safe water, and it would allow multinational corporations to profit off increased water rates with virtually no recourse for New Jersey residents.’’

Advocates argued otherwise. They said the BPU will still retain jurisdiction over how much rates can rise, if such acquisitions or leases are approved by municipalities.

Acquisition of municipal water systems has been a new trend in the sector in recent years, with large water purveyors convincing local officials it is a cheaper and better way to run their systems.

The issue concerns the state Division of Rate Counsel, which represents ratepayer interests in utility cases.

“Investor-owned utilities won’t buy a system unless they think they are going to make money from it,’’ said Director Stefanie Brad in written testimony submitted to the Assembly State and Local Government Committee when it considered the bill.