Middlesex Water Co. announced that the New Jersey Board of Public Utilities (BPU) has approved a $4.2 million increase in base water rates to its customers located in central New Jersey effective July 20, 2014, reflecting an overall revenue increase of approximately 6.34%. In its original petition filed with the BPU in November 2013, Middlesex sought an increase in base rates of $10.6 million or approximately 15.9% to recover costs of increases in chemicals, fuel, electricity, technology, taxes, labor, benefits and other operating and maintenance expenses. That petition was updated in March 2014 to an increase in base rates of $8.1 million or approximately 12.1%.
Middlesex Water has invested more than $11 million in prudent infrastructure rehabilitation since its last rate filing in January 2012. The new rates are designed to allow for a 6.72% overall rate of return on invested capital in rate base of $208.5 million. The return on equity portion of the rate of return was set at 9.75%.
"Recent economic conditions positively impacting employee benefit costs, combined with overall improved operating results during the test period used for ratemaking purposes have enabled us to negotiate this favorable outcome, despite it being well below our initial filing," said Dennis W. Doll, Middlesex Water president and CEO. "Making prudent investments in our drinking water infrastructure to deliver safe, adequate and proper water service to customers and maintaining fair and reasonable rates continues to be a delicate balance," Doll added.
Middlesex Water Co. presently serves retail customers in the townships of Woodbridge, Edison, the Borough of South Plainfield, Carteret, Metuchen; the city of South Amboy; and the township of Clark. The company serves a significant population through wholesale contracts with the Boroughs of Highland Park, the Old Bridge Municipal Utilities Authority, Marlboro Township and the Townships of East Brunswick and Rahway. The increase will only affect only the retail and contract customers listed above.
Source: Middlesex Water Co.