New Jersey American Water completes $21.8M acquisition of Egg Harbor City water and sewer systems

Camden-based New Jersey American Water on Thursday said it completed its acquisition of the water and wastewater systems of Egg Harbor City for $21.8 million. The sale of these systems, which serve approximately 3,000 customer connections combined, follows the approval of the New Jersey Department of Community Affairs and the New Jersey Board of Public Utilities, and is the first in the state of New Jersey to be completed through the Water Infrastructure Protection Act.

The state’s WIPA legislation was signed into law in 2015. It permits the sale or lease of municipally owned water or wastewater systems that meet certain criteria. The New Jersey Department of Environmental Protection certified the city’s request to pursue the sale through the WIPA path in April 2019.

“This is a historic moment for New Jersey communities that simply do not have the resources or capabilities to adequately or efficiently maintain their own water and wastewater systems,” New Jersey Assembly Majority Leader and WIPA sponsor Louis Greenwald (D-Voorhees) said. “When my fellow legislators and I passed WIPA, our goal was to help struggling municipalities find alternatives to meet their needs by providing capital investment, expertise and financial assistance. It is incredibly gratifying to see Egg Harbor City be able to take advantage of this program to get the system upgrades they need in order to better service the community.”

Under the agreement, New Jersey American Water will invest $14 million in the first 10 years to make needed upgrades to the city’s water and wastewater systems, including $9 million in the first five years, while keeping rates stable for customers. Some of these projects include construction of an emergency interconnection with the New Jersey American Water regional system for resiliency, water and sewer main replacements, valve and hydrant replacements and wastewater pump station improvements.

“This agreement provides tremendous benefits for our residents. The sale of our city’s water and wastewater systems to New Jersey American Water will provide nearly $22 million to help the city pay off existing debt while leaving additional money to assist in other areas of the city’s budget. Additionally, the company is committed to investing $14 million into much-needed system improvements. All told, this means better infrastructure, stable water rates and millions in funds for the city, none of which would be possible without the sale of the systems,” Egg Harbor City Mayor Lisa Jiampetti said.

“We are ready to provide the residents of Egg Harbor City with reliable water and wastewater services, as we do for over 190 municipalities across the state,” Mark McDonough, president of New Jersey American Water, said. “Our plan includes rebuilding and modernizing the town’s water and wastewater infrastructure for continued quality and increased reliability while stabilizing rates and providing excellent customer service. Additionally, three of the city’s water and wastewater employees are joining our local operations team starting today.”