Customers of New Jersey American Water will experience adjustments to their utility billing as higher base rates are offset by substantial litigation credits. The revised rate structure, authorized by state utility regulators, incorporates funds recovered from legal settlements involving chemical contamination, leaving many households with lower overall monthly costs despite an underlying rate increase.
The changes stem from a decision by the New Jersey Board of Public Utilities, which formally granted approval for updated utility rates alongside a targeted customer credit program. Known as the PFAS Litigation Universal Surcredit, or PLUS, the relief mechanism directs proceeds and accumulated interest from lawsuits related to per- and polyfluoroalkyl substances directly back to eligible ratepayer accounts.
Under the newly approved framework, an average residential water customer consuming approximately 5,700 gallons per month will see an initial base rate increase of roughly $4 per month. However, eligible water customers will concurrently receive a monthly PLUS credit of $9.88 for a full 12-month duration. When applied to the average monthly statement, this financial offset produces an overall net savings of nearly $6 each month for typical residential water users.
The rate adjustments also extend to customers who utilize wastewater services. Residential wastewater bills are slated to rise by approximately $4 per month under the regulatory determination. For households receiving both water and wastewater services from New Jersey American Water, the combined rate adjustments will result in an increase of nearly $8 monthly, which will be counterbalanced by the $9.88 monthly credit to deliver an average net reduction of about $2 per month over the coming year.
Utility officials emphasized that the regulatory determination aims to balance customer expense considerations against urgent operational needs. Mark McDonough, president of New Jersey American Water, stated that the decision enables necessary system upgrades while prioritizing household affordability. He noted that the plan supports critical investments to replace aging infrastructure, advance water quality projects, and improve overall system reliability.
The updated rate schedule is designed to generate an annual revenue increase of $68 million for the utility. This additional revenue will help support a broader capital investment initiative exceeding $1.4 billion, which will be directed toward extensive modernization projects across the company's treatment, transmission, and distribution networks.
Among the primary initiatives funded by these capital investments is the replacement or rehabilitation of nearly 120 miles of aging water mains throughout the service territory. The company is also continuing efforts to remove and replace lead service lines, while simultaneously upgrading treatment facilities—such as the Raritan-Millstone Water Treatment plant in Bridgewater—to address PFAS and other emerging chemical contaminants.
Company representatives indicated that these infrastructure projects are designed to bolster water reliability for a broad spectrum of consumers. Beyond standard residential households, the system improvements are intended to support commercial enterprises and vital community institutions, including local schools and healthcare facilities, by safeguarding dependable service delivery.
The PLUS credit program specifically allocates more than $79 million derived from PFAS litigation recoveries and associated interest to eligible water customers. The resulting $9.88 monthly distribution is slated to appear on eligible customer invoices for a 12-month period that began in September 2026, offering extended financial relief across the entire designated cycle.
To ensure consumers understand how the legal recovery funds are applied, the utility will display the credit as a distinct line item on billing statements under the "PLUS" designation. McDonough highlighted that this transparent accounting method provides customers with clear visibility regarding the direct return of lawsuit proceeds.
Looking ahead, New Jersey American Water confirmed that any additional legal proceeds obtained from future PFAS settlements will also be passed on to consumers. Following formal verification and review by the New Jersey Board of Public Utilities, subsequent settlement funds are expected to be disbursed to customers in the form of one-time bill credits.
The newly established rate schedule and credit disbursements officially took effect on Sept. 15. The utility noted that while standard benchmarks offer an estimate of financial impacts, actual charges on individual bills will vary depending on specific water consumption levels, customer service classifications, and geographic locations across the state.
Alongside the newly implemented rate adjustments, New Jersey American Water continues to maintain payment assistance resources for eligible low-income households. The company offers budget billing options alongside flexible payment arrangements to help individuals manage their ongoing utility expenses and avoid financial strain.
In conjunction with the recent rate approval, the water utility is collaborating with the New Jersey Department of Community Affairs to assess enrollment mechanisms for its Universal Affordability Tariff program. This collaborative review includes evaluating potential automatic enrollment pathways for customers who currently participate in specific state-administered energy assistance initiatives.
Highlighting the critical nature of utility services, McDonough underscored the availability of relief programs for those confronting financial challenges. He stressed that water service is essential and encouraged customers facing hardship to explore available support options and contact the utility directly before falling behind on their scheduled payments.
New Jersey American Water represents the state's largest water utility provider, currently delivering water and wastewater services to approximately 3 million residents across New Jersey with a workforce of more than 875 employees.
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