Higher Water Rates – Bigger Profits – Dirty Water – Less Accountability on The Horizon
Tom Johnson at NJ Spotlight writes today about a Christie Administration proposal to reduce Board of Public Utilities (BPU) regulatory oversight of how private water companies and public authorities recover the costs of investments in infrastructure upgrades (see:
The proposal grew out of the Christie Administration’s “infrastructure asset management and financing” initiative discussed at last October’s Clean Water Council annual public hearing at DEP. BPU President Lee Solomon spoke at that hearing – see:
At that time, the Gorilla in the Room shining a bright light on NJ’s aging infrastructure was not a huge hurricane and severe flooding, but the emergence from another serious statewide drought (see:
- The ARC is Not Alone: Trenton’s Other Infrastructure Disaster
- Still Lurching From Drought To Flood – And Still In Denial About It
Again, the Christie Administration misdiagnoses public policy problems and diverts the focus, thus frustrating real reform.
This misdiagnosis is the result of pervasive themes in the Christie Administration, including:
- a deep hostility to government, regulation, and independent local public authorities
- a fact free faith in private sector and markets
- ideological opposition to raising public sector revenues (AKA “starve the beast”)
The basic problem is underinvestment, not regulatory oversight.
Slogans like cutting “Red Tape” will not close NJ’s $28 billion water infrastructure deficit.
Drinking water infrastructure deficits exceed $8 billion and waste-water exceeds $20 billion.
So, if, as Tom Johnson reports, the private water companies and the Administration are seeking a “regulatory mechanism” to “minimize impacts on customers”, then I say retain the current traditional rate base rate of return regulatory oversight mechanism.
But, if what they really seek are higher profits while dodging public accountability and avoiding raising the money to finance needed investments, then by all means proceed with the Christie proposal.
That will produce higher profits for private corporations, while consumers will pay higher bills for the status quo.
The policy discussion must include DEP mandates for utilities to conduct infrastructure assessments and then make necessary upgrades.
There must be DEP enforcement driven mandates for investment in infrastructure.
If not, our huge infrastructure deficits will continue to go unaddressed, as the private sector will not make these investments and public authorities will not take on the fight due to local political pressure to control user rates.