New Jersey American Water, a subsidiary of American Water Works Company, filed a rate request on January 16, 2026 with the New Jersey Board of Public Utilities to recover more than $1.4 billion in capital investments through December 2026. The plan covers extensive infrastructure upgrades, replacement of nearly 120 miles of aging service lines, lead‑service‑line replacement, and new PFAS‑mitigation technology to meet state and federal standards.
The proposed rate increase would lift the average residential water bill by about $10 per month and the average wastewater bill by $8 per month. To offset the impact, the company seeks to expand its H2O Help to Others program, broaden eligibility for LIHEAP and USF recipients, and pass back savings from a forthcoming Gross Receipts Tax refund to customers.
The investment is driven by a combination of aging infrastructure, a state mandate to replace all lead and galvanized service lines by 2031, and the need to install granular activated carbon and anionic exchange resin systems to reduce PFAS concentrations below the New Jersey standard. These upgrades are essential to maintain service reliability, protect public health, and comply with evolving regulatory requirements.
The New Jersey Board of Public Utilities will review the request over a period that can exceed nine months. The board will assess the cost justification, affordability impact, and regulatory compliance of the proposed rates. Historically, the board has approved requests that closely match the company’s submissions, but it retains the authority to adjust the approved amount if it deems the request excessive or insufficient.
The company’s expansion of customer assistance programs is designed to protect low‑income households. By linking assistance to LIHEAP and USF eligibility, the company aims to reduce the financial burden of the rate increase. The Gross Receipts Tax refund, while not yet quantified, is expected to provide additional savings to customers, further mitigating the rate hike’s impact.
Mark McDonough, president of New Jersey American Water, said the company remains committed to “investing in critical system upgrades, improving water quality and reliability, and keeping service affordable for the communities we serve.” He highlighted the importance of the PFAS and lead‑line projects in safeguarding public health.
American Water Works Company is the largest regulated water and wastewater utility in the United States. Rate approvals are essential for the company to recover capital expenditures and sustain its long‑term capital plan. The January 2026 filing follows a similar request in January 2024 that sought to recover $1.3 billion, underscoring the company’s ongoing investment strategy.
If the Board approves the request in full, the company will be able to proceed with the planned upgrades and meet regulatory deadlines. A partial approval or denial could delay critical infrastructure projects, potentially jeopardize compliance with PFAS and lead‑line mandates, and increase the risk of service disruptions for the 2.9 million customers statewide.
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