NJ Adopts Nation’s Best Water Affordability Transparency Law
Under the state’s new law, we’ll be able to see where, and to what extent, people struggle to afford utility bills and suffer devastating impacts like shutoffs and tax lien sales.
(UPDATE: For more on this pathbreaking new law, see this webinar and a 30-minute video podcast.)
In New Jersey and across the United States, communities are grappling with rising water and sewer rates, which are increasingly unaffordable for many low-income households. When people cannot afford to pay, they face loss of access to essential water service, spiraling debt and economic hardship, loss of housing, loss of parental custody of children, and grave health risks. Lower-income households and households of color are particularly likely to suffer these consequences.
Before the COVID-19 pandemic, one-fifth of all New Jersey households likely faced challenges affording their water and sewer bills. The pandemic’s economic fallout only exacerbated this situation. And the need for massive investment in our aging water infrastructure will continue to drive rates up. Yet, as is the case around the country, New Jersey lacks permanent programs to ensure affordable access to water.
A new law signed today by Gov. Murphy (A3329 / S994) will reveal—and will continue to track—the full extent of New Jersey’s water affordability challenges. And that’s essential to crafting comprehensive solutions.
New Jersey now has the nation’s strongest transparency requirements concerning water, sewer, and energy utility affordability.
Under the state’s new law, we’ll be able to see where, and to what extent, people struggle to afford utility bills and suffer devastating impacts like shutoffs and tax lien sales. The limited availability of data is a critical missing link to solving the water affordability problem not only in New Jersey, but nationwide.
(For more on water affordability solutions, see the Water Affordability Advocacy Toolkit published in June by NRDC and National Consumer Law Center.)
New Jersey now requires all water and sewer utilities (as well as electric and gas utilities) to submit, at the zip-code level, monthly data regarding rates, average and median customer bills and usage, arrears, shutoffs, tax liens sold on people’s homes for non-payment, late fees and penalties, payment plans for household water debt, locally-available assistance or affordability programs, and other metrics relating to affordability. The legislation was sponsored by Senator Teresa Ruiz and Assemblywoman Angela McKnight.
The closest precedents from other states (IL and CA) apply only to investor-owned utilities. Critically, the New Jersey law applies to all water and energy utilities—including the publicly owned water and sewer systems that, as in other states, serve the majority of the population.
Under the law, the Board of Public Utilities must publish quarterly reports and post the raw data in in a readily accessible format. In each report, the Board must provide its assessment of whether existing affordability or assistance programs are sufficient to meet the needs of customers who struggle to pay their water and energy utility bills.
New Jersey’s new law reflects an emerging trend. Lawmakers are recognizing the need for transparency when it comes to affordable access to essential utility services. The New Jersey law, sponsored by Senator Teresa Ruiz and Assemblywoman Angela McKnight, passed with an overwhelming bipartisan majority. A similar law in New York, which also passed with strong bipartisan support, is sitting on the governor’s desk, awaiting signature. Illinois’ extensive reporting requirements (which apply only to investor-owned utilities) also passed with broad bipartisan support last year, as part of the state’s landmark climate law. Last year, the U.S. House of Representatives passed legislation that would have required, and provided funding for, robust collection of similar data (see sections 13304(b)(2) and (b)(5) here).
Momentum for New Jersey’s transparency law grew from the ongoing COVID-19 utility arrears crisis. The state maintained the longest-running moratorium on utility shutoffs during the pandemic
, to protect access to essential home water and energy service.* Federal and state funds have been allocated for utility arrearage forgiveness, along with expanded eligibility for the pre-existing energy assistance programs. Nonetheless, arrears remain very high, with millions of New Jerseyans living in households behind on their utility bills, totaling over $500 million in residential utility debt.
Permanent Shutoff Protections Are Also Growing
Heightened attention to the risk of water shutoffs during the pandemic has spurred new, permanent protections for water customers in New Jersey—matching protections that have long applied to electric and gas customers.
The state law that extended COVID-19 shutoff protections to March 2022 also expanded the state’s annual winter shutoff protections to cover water. Every year, from Nov. 15 to March 15, low-income households and others facing temporary financial crisis will be protected from water shutoffs if they can’t pay their bill. Like the new data reporting law, this is now the strongest seasonal water shutoff protection of any state.
Also this year, the New Jersey Board of Public Utilities amended its consumer protection rules to apply other basic shutoff protections to water and customers—at least for the 40% of the population served by investor-owned water utilities. These protections, which had previously only applied to electric and gas, include shutoff protections on days with extreme hot temperatures (90+ degrees) and cold temperatures; a requirement for in-person delivery of shutoff notices; and a requirement to solicit information from customers about the presence of any life-saving equipment that requires water for operation, which qualifies a household for “medical emergency” shutoff protection).**
The Road Ahead
NRDC worked with New Jersey-based partners including AARP, Citizen Action, Legal Services of NJ, and Food & Water Watch to make the new transparency law a reality. We are also working to support the state’s implementation of the temporary Low Income Household Water Assistance Program (look out for a webinar coming next month).
Additional water affordability legislation is still pending in Trenton. One bill would expressly authorize publicly-owned water and sewer systems to offer discounted rates to low-income households.*** Another would create a permanent, statewide low-income water assistance program (modeled on a bill that was just passed by California's state legislature).
As the saying goes, you can’t manage what you don’t measure. New Jersey’s new transparency law provides the measure of water affordability, now and into the future. It’s a foundational, precedent-setting step. And it paves the way for effective, long-term solutions.
*After several extensions by the governor and legislature, a blanket moratorium on utility shutoffs ended in December 2021, protections for all water customers and low-income energy customers continued into March 2022, and utility customers that applied for available assistance funds by June 2022 were able to get a further extension while their applications were pending.
**Additionally, for both water and energy utilities, the Board’s new rules increase to $200 the minimum amount that a customer must be in arrears before a shutoff can occur (previously $100); increase to 20 days the minimum length of time that a bill must be overdue before sending a shutoff notice (previously 15 days); and increase to 30 days the minimum length of time that a bill must be overdue before a utility can require a customer to pay a deposit to maintain service (previously 15 days). The Board’s rules did not fully incorporate certain aspects of shutoff protection laws passed in the last year. Nor did they adopt certain additional recommendations that NRDC offered. The Board stated that it anticipates further rulemaking to address some of those issues, such as clarifying bill dispute resolution processes and eligibility requirements for winter shutoff protections, improving the content of shutoff notices, and protecting tenants from shutoff when the landlord fails to pay the utility bill.
*** Without express authorization in state law, publicly owned water and sewer utilities are uncertain whether they are allowed to use rate revenues to fund low-income assistance, even though existing law may actually provide adequate authority in some or even all cases.