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No drop in the bucket: Water infrastructure upgrades will cost tens of billions

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Even before Hurricane Sandy, those charged with overseeing the state's water infrastructure knew they were falling behind on maintenance.

"Right before the storm came, the things we were working on were very focused on asset management," said Michele Siekerka, assistant commissioner for water resource management at the New Jersey Department of Environmental Protection.

When Sandy came, Siekerka said, it not only caused new damage, but confirmed asset management was indeed an area in need of immediate attention.

New Jersey's wastewater, stormwater and drinking water infrastructure is old, and in varying states of disrepair. Representatives from the public and private sectors discussed the challenges facing water infrastructure at a panel organized by the nonprofit news website NJ Spotlight. The water panel was the first of a daylong discussion of the state's infrastructure.

Two major themes emerged from the discussion. First, much needs to be done to get the state's infrastructure in sustainable shape. Second, that work is going to cost tens of billions of dollars — much, much more if we don't act soon.

Richard Dovey, president of the Atlantic County Utilities Authority, said it can be difficult to focus the public's attention on the need for water infrastructure improvements.

"This sector, water, sewer, even solid waste, is particularly hard to get across to the public," he said. "Our infrastructure's underground."

He said it's also tough to get media attention. While problems with road infrastructure, such as unstable bridges, make front-page news, the state's water infrastructure often is forgotten.

While it may not garner headlines, the issue has been extensively studied. One such report was recently published by the group Facing Our Future, a bipartisan group of former government officials. Robert E. Hughey, a former DEP commissioner and member of that group, said the state needs to invest some $40 billion to protect and properly update our water infrastructure.

"And every year we don't address it, it becomes more expensive," he said.

Hughey said the good news is we can afford to pay for it.

"Water is one of the best bargains in the world," he said, noting that people gladly pay far more than the price of tap water for bottled water.

Stephen P. Schmitt, vice president of operations at New Jersey American Water, said water rates may need to double in the next two decades. That might sound steep, but Schmitt said that's because utilities are basing their rates merely on annual operating expenses, which "are false rates," he said.

Many utilities are replacing their infrastructure at a rate of 0.25 or 0.5 percent per year, he said, meaning it would take up to 400 years to fully replace a system.

He said utilities and regulators need to take responsibility for the long-term upkeep of infrastructure systems. One step in the right direction, he said, is the distribution system improvement charge mechanism, which the Board of Public Utilities recently created in hopes of encouraging water utilities to be proactive about maintenance.

Siekerka said policymakers also have to be realistic, and ensure the money spent is spent wisely and efficiently. She said the DEP is working on a new water supply master plan for the state, though she said it's not yet clear when it will be released.

Hughey said planning is necessary, so officials know what needs to be done to keep the infrastructure in good form. But he said the bigger challenge right now is facing the costs.

"We have a lot of need," he said. "We know what those needs are. The question is: Are we going to pay for them?"

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