On Friday, a six-inch water main under Bloomfield Avenue in Hoboken burst, not an uncommon occurrence in North Jersey, where, in some cases, the water and sewer systems are more than a century old.
The age of those pipes is drawing the attention of the Christie administration, which has put forward a white paper arguing New Jersey puts its economy and environment at risk when it ignores its infrastructure needs. That, in turn, imposes costs to natural resources the state can ill afford.
The administration’s concern probably translates into higher water and sewer bills for customers in the short term, but less expensive costs in the long run, according to officials.
“If we don’t begin to adopt a long-term capital improvement program, the ultimate cost to ratepayers five to 10 years down the road will be unimaginable,” said Board of Public Utilities President Lee Solomon. “The costs will be astronomical.”
At present, repairs and replacements of the state’s water and sewage pipes and treatment plants are estimated at more than $20 billion, according to the American Society of Civil Engineers. With the average age of sewer lines being over 70 and the estimated life expectancy of pipe at 50, the state is approaching a time when unanticipated failures may occur.
As with the Garden State’s transportation infrastructure, finding the money to repair and rebuild aging systems is a huge open question. The funds for fixing New Jersey’s water infrastructure are rapidly drying up. The New Jersey Environmental Infrastructure Trust Financing Program is projecting shortfalls of $90 million in 2009 and $274 million in 2010. These projections are based upon a current project demand of $520 million per year.
A white paper issued by the Clean Water Council of New Jersey suggested the state’s efforts to keep water and sewer rates steady for years is a sure sign of sound management, but it may also mask systemic problems that present imminent danger.
“Utility rates absolutely must be set at a level sufficient to recover the cost of current operations and maintenance AND the full cost of capital," the paper argued. “Full cost pricing ensures that utility rates are not artificially low with too little invested in infrastructure renewal.”
The paper, the subject of a public hearing yesterday in DEP’s first floor conference room, was generally praised by industry representatives and by Solomon and DEP Commissioner Bob Martin, who called the state’s water infrastructure system critical to the growth of the New Jersey economy.
“In the long run, we need to continue to invest in capital improvements while still keeping rates as low as possible," Martin told the council. He noted one option might be to expand the state’s infrastructure trust, which has loaned out more than $1 billion in the last two years.
Complicating the issue is the hodgepodge of entities managing the state’s water and sewer infrastructure. On the water side, the BPU regulates rates of a small number of investor-owned utilities, which serve about 40 percent of the state. Solomon said the agency plans to hold stakeholder meetings later this year on a proposal to allow those utilities to recover the cost of their capital investments more quickly, a step that could lead to more investments in the systems.
“This is a long-term problem; it’s not going to be solved overnight," Solomon said.
There also are 620 public community water supply systems, but three-quarters of them serve less than 3,000 customer accounts. Most are overseen by the state Department of Community Affairs, but those municipalities are hard-pressed in these tough budgetary times to find the resources to invest in their infrastructure.
“It’s been very difficult," said Marc Pfeiffer, deputy director of the DCA’s Division of Local Government Services, citing Trenton and Newark as two communities that have grossly underinvested in their water systems.
Jeff Tittel, executive director of the New Jersey Sierra Club, advised the council to be leery of privatizing municipally owned and operated systems, arguing it often leads to higher rates for customers.