Government South Orange Towns

South Orange Enters Into Contract With NJ American Water

The South Orange Village Board of Trustees voted Monday night to approve “a commodity-demand agreement for the purchase of water from New Jersey American Water Company and authorizing its execution.”

(Find the full contract attached to the Board agenda here.)

Basically, after years of legal wrangling with the East Orange Water Company over water quality and several months of public discussion, South Orange has sealed the deal to switch to NJ American Water as its water supplier and operator as of December 31, 2016.

Village President Alex Torpey acknowledged the years of work that went into the deal and the resolution, saying, “This is certainly a significant one.”

Village Counsel Steven C. Rother explained, “We’ve negotiated this for some considerable period of time.” He said that the action was very important because the Village will be leasing water from NJ American Water for a term of 30 years.

“But it’s also very flexible,” said Rother. “We negotiated a number of provisions into the agreement that give the Village a lot of flexibility, and the amount [of water] that we have to buy is very flexible in that we have two years to adjust the amount and the amount can be adjusted quarterly.”

Rother noted that the agreement gives the Village two years to address “any water losses that we are having so we can fine tune our needs.” Trustee Howard Levison explained further that the Village is currently losing 40-50% of its water in the system. “In the short term, we need to improve to the industry standard of 10-15% water loss and also check that our meters are measuring consumption correctly.”

Another plus: South Orange retains the option to sell its water system “because this contract would be assignable to anybody who would want to buy the system.” He also noted that South Orange is making this volume discounted bulk purchase “at a price that is regulated by BPU” — the State of New Jersey Board of Public Utilities.

Levison explained further about the quarterly adjustments, saying the Village can vary the amounts per season and based upon such variables as whether or not Seton Hall is in session.

Levison also said that NJ American Water will pick up the cost of interconnecting lines and creating redundancies at a pumping station “to ensure enough pumping capacity.” He noted that there will also be an electric generator at the pumping station “so that we will still have water if power goes out…. All that cost is assumed by NJ American Water.”

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