Utility acquires Salem, NJ water, sewer system

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New Jersey American Water  signed an agreement to acquire the water and sewer system of the City of Salem, N.J. for $18 million. This municipally owned system serves more than 2,300 customers. The agreement follows a voter referendum that took place on November 7, which passed with over 60 percent of the voters approving the sale of the system.

Salem is a 16-mile drive from Delaware. American is based in Camden, NJ.

As part of the agreement, and subject to approval from the New Jersey Board of Public Utilities, New Jersey American Water will invest more than $50 million in infrastructure improvements in the first ten years following completion of the acquisition.

The investments include a capital improvement plan, including critical system upgrades, implementation of PFNA treatment, and repair of the city’s aging water and sanitary sewer infrastructure. In addition, New Jersey American will implement a rate plan to hold current sewer rates for two years following closing, then increase rates no more than 3 percent annually for the next three years.

“Selling the systems to New Jersey American Water allows the city’s water and sewer utilities to be handled by professional experts, keeping these critical services safe and affordable for our residents,” said Salem City Mayor Jody Veler. “The sale will also eliminate $11 million in utility debt and pay off a portion of the municipal debt, as well as enable us to put over $1 million back into the city budget annually. I am thankful to our residents for recognizing the importance and the value of this agreement and for voting yes to securing better water and sewer services for our city.”

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The company anticipates completing the acquisition in the second half of 2024, pending approval from the NJ BPU.

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