Politics & Government

BurlCo Freeholder Demands Explanation of Settlement

Freeholder Director Bruce Garganio has filed a public records request with the state seeking an explanation of its settlement with New Jersey American Water.

Hoping to find out why a judge has tentatively approved a $30 million rate increase for New Jersey American Water, Freeholder Director Bruce Garganio last week filed an Open Public Records (OPRA) request with the N.J. Division of Rate Counsel requesting a full accounting.

“I want to find out how suddenly turned into a $30 million award in additional revenues,” said Garganio. “I think a $76 million swing is worthy of explanation.”

Meantime, Garganio has reached out to Robert Hanna, president of the New Jersey Board of Public Utilities (BPU), and demanded the proposed increase be taken up by the entire BPU in an open public session.  

“, opposing any increase with American Water, and deserve the right to present that petition and to be heard,” he said.

New Jersey American Water initially sought a 15.5 percent increase—or $95.5 million more in fees from ratepayers. Despite the testimony of its own financial expert that the company’s revenues should be cut $46 million, the Division of Rate Counsel negotiated an increase of $30 million.

“I continue to be baffled by Rate Counsel’s settlement, and the judge’s order provides no answers,” said Garganio. “Rate Counsel says that American Water has legitimate costs that need to be funded, but you won’t find an accounting of those costs anywhere.”

Garganio said his records request was directed to the Rate Counsel, and specifically asks for a “line-item accounting” of the $30 million to be awarded to American Water under the tentative settlement.

According to the earlier testimony of financial consultant Robert Henkes, American Water’s requested increase was bloated by millions of dollars for incentive compensation for management employees who were already getting salary increases; overestimated pension and retirement benefits; promotional marketing; public relations; employee awards; professional lobbyists; and country club fees.

In a recent letter to Hanna, Garganio wrote, “It’s not difficult to stand behind Mr. Henkes’ testimony and conclusions; the company’s claim that it needs more revenue to address pressing infrastructure needs runs counter to the most recent financial report of its parent company. In the midst of this debate, American Water Works Company, Inc. reported a year-over-year 15.6 percent increase in net income and 19.3 percent increase in adjusted net income, as well as increases in revenues and cash flow.”

- Courtesy of the Office of the Burlington County Freeholders


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