New Jersey American Water to invest $50 million over 10 years to improve Salem’s water, wastewater infrastructure
(UI) – New Jersey American Water completed its acquisition of the water and wastewater systems of the City of Salem, N.J. for $18 million. These former municipally owned systems serve more than 2,300 water and 2,300 wastewater customers.
On May 22, 2024, the New Jersey Board of Public Utilities (NJ BPU) approved the municipal consent allowing New Jersey American Water to provide service to Salem City customers as of the closing of the transaction.
The agreement to purchase the systems follows a voter referendum that took place on November 7, 2023, which passed with over 60 percent of the voters approving the sale of the systems to New Jersey American Water.
As part of the agreement, New Jersey American Water committed to invest over $50 million in improvements in the first 10 years. These investments include a robust capital improvement plan, including critical system upgrades, implementation of PFNA treatment and repairing the City’s aging water and wastewater infrastructure.
“Selling the systems to New Jersey American Water is the right decision for our community because it allows the City’s water and wastewater utilities to be managed by a professional company whose sole purpose is to focus on making appropriate, efficient investments and keeping these critical services safe, reliable, and affordable for our residents,” said Salem City Mayor Jody Veler.
“The sale will also eliminate $11 million in utility debt and pay off a portion of the municipal debt, as well as enable us to put over $1 million back into the City budget annually.”
This is New Jersey American Water’s sixth acquisition in the last six years. In June 2023, New Jersey American Water completed the acquisition of Egg Harbor City’s water and wastewater system via the State’s Water Infrastructure Protection Act, adding more than 1,500 water and 1,500 wastewater customers.
The company also completed four wastewater system acquisitions within the company’s water footprint, adding a total of more than 11,300 new wastewater customers. The company acquired the Somerville wastewater system with 3,800 customers in 2023; the Bound Brook wastewater system with 2,800 customers in 2022; the Long Hill Township wastewater system with 2,900 customers in 2020, and the Mount Ephraim wastewater system with 1,800 customers in 2019.
Additionally, New Jersey American Water signed an agreement earlier this year for the purchase of the Manville wastewater system with 3,700 customers, which was approved by voter referendum in November 2023. The company anticipates completing this acquisition in the second half of 2024, pending approval from the NJ BPU.
“We are honored and grateful to the residents and elected officials of Salem City, who are entrusting us with the ownership, improvement and operation of their water and wastewater systems, beginning today. We are ready to start delivering on our commitment to making the necessary investments in these systems to help ensure clean, safe, reliable and affordable service for all residents,” said Mark McDonough, president of New Jersey American Water.
“We are also excited to have six Salem City utility employees become New Jersey American Water employees today, joining our South Operations team and Water Workers Local 99.”
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