Monday, December 8, 2008 9:00 am - 1:00 pm
NJ Department of Environmental Protection - Public Hearing Room
401 East State Street, Trenton, NJ
The Clean Water Council of New Jersey seeks public testimony on an issue critical to both environmental protection and economic vitality - water infrastructure financing, specifically the issues of funding for capital investments, rehabilitation, operations and maintenance for water supply, wastewater and stormwater infrastructure. The Council has formulated five questions for public consideration and response. Based upon the testimony at this hearing, the Council will develop a set of recommendations for the NJDEP Commissioner. Therefore, the members seek comments from interested persons so that they can recommend improvements to New Jersey's approach to water infrastructure financing.
Specifically the Council seeks input and examples that address the following questions:
Funding for Urban Infrastructure
State policy targets urban areas for development and redevelopment but these places need multi-billion dollar investments to address combined sewer overflows (CSOs) and leaking and deteriorated pipe systems. Yet these places often lack the rate base to finance needed capital improvements without imposing an excessive fiscal burden on customers. What types of public and public/private sustainable funding can address these needs on a meaningful scale? How should it be structured to encourage local participation?
Sustainable Pricing and Management
Some local water/wastewater utility authorities are financially self sustaining and have the resources needed to maintain and upgrade their systems without borrowing. Others could become so if they employed better management techniques such as full-cost pricing, life-cycle cost analysis, and other asset management techniques, maintained appropriate capital reserves, tapped privately-funded maintenance reserves for new infrastructure, and charged appropriate rates. How can these practices be encouraged or required through financial incentives, state regulations, or other means?
Maintenance of Adequate Local Reserves
State law and regulations limit local utilities’ ability to set aside adequate financial reserves for ongoing maintenance and needed upgrades and expansions. In fact, it appears that some local utilities are operating as revenue sources for local governments. What legal and/or regulatory changes are needed to ensure that local utilities can maintain adequate capital and emergency reserves and so that utility rate-based revenues are exclusively used for utility functions including water resources, water supply protection and environmental infrastructure improvement projects?
Financing Mechanisms for Stormwater Management
Effective stormwater management protects water quality and quantity and can reduce loads on wastewater treatment facilities. However, stormwater is the only major water infrastructure system that lacks a utility structure and the rate-based revenues that would allow proper management. What mechanisms could provide a financial structure for stormwater management and how could they be authorized?
Financial Incentives for Innovative Technologies
The cost to build, operate and maintain water infrastructure can be reduced through innovative technologies that conserve water, encourage water reuse, and use energy efficiently. Meanwhile, development best management practices that reclaim stormwater on-site can reduce the load on wastewater plants. How can financing tools encourage and/or require greater reliance on these approaches?