New Jersey American Water to acquire Bound Brook sewer system for $5M

Acquisition will add 2,900 new wastewater customers

A New Jersey American Water tower. (NJAW)

New Jersey American Water is acquiring the wastewater collection system of the borough of Bound Brook for $5 million, according to a Monday announcement from the Camden-based utility.

This will be New Jersey American Water’s third wastewater acquisition within the company’s water footprint in the last three years, adding a total of more than 7,500 new wastewater customers. The company acquired the 1,800 customer Mount Ephraim wastewater system in 2019 and the 2,900 customer Long Hill Township wastewater system in 2020.

In November 2021, nearly two-thirds of Bound Brook voters approved the sale in a referendum.

This municipally owned system serves approximately 2,900 customers, most of whom already receive water service from New Jersey American Water.

“I want to thank the elected officials and residents of Bound Brook for entrusting us to manage and improve their sewer utility and protect the environment from the many risks associated with running a sewer collection system,” said Mark McDonough, president of New Jersey American Water. “Providing water and wastewater service is all we do, and as Bound Brook’s water company for over a hundred years, we are deeply committed to making the needed improvements to provide the community with sewer service that is as safe, reliable and affordable as the water service we provide.”

As part of the acquisition agreement, New Jersey American Water will invest more than $11 million in sewer system improvements in the next 10 years, while freezing current sewer rates for residents for two years and increasing rates no more than 3% annually for the three years after that.

“I am grateful to the voters for recognizing that selling the system to New Jersey American Water is the best solution for our town,” said Bob Fazen, mayor of Bound Brook. “The sale proceeds will enable us to pay down the borough’s municipal debt and stabilize, or even potentially reduce, property taxes for our residents. Additionally, New Jersey American Water will be adding the sewer charges onto the existing water bills, which removes the significant burden of customer billing from the borough’s finance department.”

New Jersey American Water anticipates completing the acquisition in the second half of 2022, following approval from the New Jersey Board of Public Utilities.