On Horace Avenue, a quiet suburban street in Palmyra, workers wearing hard hats and yellow safety vests were knee deep in a trench running between Fourth and Fifth Streets, using shovels to dig the sandy soil away from pipes connecting water and gas mains to individual houses.
On a freezing December morning, the crew from New Jersey American Water was preparing the street for a new water main to replace one that has served the Burlington County town since the Riverton-Palmyra Water Company, the town’s original water purveyor, was founded in about 1889.
The old system, consisting mostly of cement pipe wrapped in sheet metal, has become increasingly leak-prone as the material ages, leading to 15-20 water-main breaks a year in the approximately 6,000 feet of pipe that are being replaced on Horace Avenue and surrounding streets.
With an investment of some $1.15 million, the company is replacing the old brittle pipes with new eight-inch diameter iron pipes that will improve service and cut maintenance costs. The new system is being laid at a rate of 200 to 300 feet a day, and is parallel to the old line which will be shut off and left in the ground when the new system becomes operational.
As the old Palmyra system gets replaced — a process that is expected to take eight to 10 weeks — the rate of breaks has dropped to only two this year, reflecting the remaining pipes in the old system.
The Palmyra project is just one example of the renewal of aging water infrastructure statewide, a process that is taking place in some locations but which needs to happen in many more, according to water industry advocates.
They argue that a long-term lack of investment in many water systems that originated in the 19th century has led to an antiquated system that is increasingly leak-prone, susceptible to water-quality problems, and expensive to maintain. According to Jersey Water Works, a multi-stakeholder coalition dedicated to overhauling the state’s creaking water infrastructure, the tab for upgrading the whole system would be some $40 billion.
The statewide initiative has won the support of a wide range of public and private entities, and replacement operations like that in Palmyra aim to work with local government.
“We try really hard to coordinate with municipalities,” said Carmen Tierno, senior director of operations for New Jersey American Water’s southwest region. “Sometimes the town might want to do something with the sewer or the gas company might be doing something, so it makes sense if we work together on these kinds of underground investments.”
The cooperative approach saves money for the water company. Edward Opczynski III, construction supervisor for the Palmyra project, said he bases his decision on which stretches of pipeline to replace partly on whether a local authority is already planning to repave a street where antiquated pipeline is buried.
About half of his projects take place in locations where repaving is scheduled, and where there is a high level of leakage, problems with water quality, or simply old pipe that can be expected to fail soon. In those cases, the water company will only pave the trench where the new pipe has been installed, leaving the paving of the rest of the street to the local authority, and saving money for other water projects, Opczysnki said.
“We can put more pipe in the ground because we don’t have to pave as much,” he said. “We can make our capital budget go farther.”
New Jersey American Water, one of the state’s biggest water utilities, says that some 15 percent of its pipes, covering 1,300 miles statewide, are between 100 and 140 years old, and nearing the end of their useful lives.
The old cement pipes such as those beneath Horace Avenue resist internal corrosion or buildup but are not as strong as cast iron, and are harder to repair. The result has been frequent water-main breaks, often requiring day-long repair operations, during which customers would have dirty water while the company flushed out the main.
The new pipelines are not only more reliable but provide better fire protection because their larger diameter provides a higher volume of water.
Still, not all old pipelines need to be replaced, Tierno said. Some cast-iron pipe, for example, is still structurally sound, and its performance can be improved by cleaning out material that has built up inside the pipe over the years, and then re-lining it to prevent that process happening again.
Targeted repairs to the Palmyra system began decades ago but progress was slow because of a limited capital budget and the large scale of the needed repairs to the old lines — known to maintenance crews as “stovepipe” because of their visual similarity to the pipe used to vent a stove or furnace.
The pace of replacement stepped up with the launch in 2013 of the Distribution System Improvement Charge (DSIC), a mechanism that imposes a surcharge on ratepayers of water systems that are regulated by the Board of Public Utilities to pay for infrastructure improvements. The system allows a water company a quicker return on its investment than under the previous system, increasing its incentive to make the improvements.
Before the DSIC began, a utility would typically initiate a new rate case with the BPU every two to three years, and would not get a return on its capital until that process was complete, Tierno said.
“The DSIC program really changed the landscape in the speed of return on that investment,” he said. “Whereas before you might have investment capital sitting there for two or three years before your rate reflected that, now we can file every six months and get an adjustment made to our tariff.”
DSIC rates for New Jersey American Water customers, effective December 1 this year, range from $1.90 a month for a 5/8-inch meter — the size of most residential meters — to $380.76 a month for a large customer with a 16-inch meter.
The surcharges apply statewide, reflecting a renewal program that is taking place for the company’s 650,000 customers in 18 counties, Tierno said.
Helped by the DSIC mechanism, the company has replaced about 16 miles of old pipe in Palmyra, Riverton, and Cinnaminson since 2012 at a cost of $15.3 million. There will be only about a mile of the old system left when it completes the Horace Avenue-Leconey Avenue project in early 2017, the officials said.
Statewide, the company said it will make some $300 million in infrastructure investment approved under DSIC by the end of 2016. The company’s total capital budget for 2016 is about $350 million.
While BPU-regulated utilities like New Jersey American Water are addressing the state’s water infrastructure shortcomings, municipally owned systems have a bigger challenge to raise the funds they need because their elected officials face taxpayer resistance to higher water charges, analysts say.
That may account for a difference between the dire warnings issued by Jersey Water Works and the relatively upbeat outlook by investor-owned utilities like New Jersey American Water whose replacement program is well underway.
Tierno argued that there’s a disparity between the level of investment by BPU-regulated utilities and that by municipal systems. “Municipalities are challenged to invest because their rates are set almost politically,” he said. “The mayor, the council have to get elected.”
Even if the regulated utilities are investing more than the municipal systems, there is no doubt that many parts of the state’s infrastructure are still in dire need of replacement, said Chris Sturm, managing director for Policy and Water at New Jersey Future.
“We hear anecdotally all the time that there are pipes being held in place by the dirt around them, that pipe material is so old that it might be wood, that 20, 30, 40 percent of treated water leaks out of the pipe,” she said.
Investor-owned utilities generally do a better job of repairing or replacing old water infrastructure but that doesn’t mean that public entities should not own water systems, Sturm argued. “There are excellent publicly owned water and sewer systems but it requires real leadership to make the right investment,” she said, arguing that municipal systems should be required to assess the condition of their systems and report that information to the public.
But while municipal systems may be lagging, there is a growing recognition that the time has come to make the long-needed upgrade to the state’s water system, said Tierno of New Jersey American Water.
“There has been a public as well as a regulatory recognition that infrastructure issues are upon us,” he said.