Water Industry News

New Jersey American Water employees protest company water rate request

Staff Writer

Some American Water Company employees have protested the company's proposed rate increase -- which could add about 20 percent to customers' water bills.

Utility Workers Union of America Locals 423 and 391 filed a joint petition last week with the New Jersey Board of Public Utilities -- the entity considering the increase -- opposing the company's request.

New Jersey American Water, Elizabethtown Water Company and Mount Holly Water Company -- which operate as subsidiaries of American Water Company -- filed for one consolidated rate increase in March with the New Jersey Board of Public Utilities. If the rate increase is approved, it could affect the water bills of 2 million New Jersey residents. The utility serves Union, Somerset, Middlesex, Hunterdon, Mercer, Burlington and Ocean counties.

The union is now one of five parties who want a say in the board's decision, said Doyal Siddell, New Jersey Board of Public Utilities spokesman. A decision may not be made until April or May 2007.

Mike Esposito, president of Local 423, said the union is serving as a consumer advocate.

"As union employees, we have a responsibility to American Water customers, not only to ensure they receive safe, reliable, quality water and service, but that it's being provided in the most cost-efficient way. We live in the communities we serve, so we bring a unique perspective as employees and customers," Esposito said.

The union says the company's rate increase petition is misleading and that the company is claiming the increase is needed to maintain its 96 percent customer satisfaction level -- a number from a 2004-05 survey.

But union workers who interact with customers daily say customer satisfaction is far lower.

And so is employee satisfaction, Esposito said.

Troubles between the union and the water company started about three years ago, Esposito said. That's when RWE Group, a Germany-based company, acquired both Elizabethtown Water and American Water Company.

RWE Group centralized the water companies' call centers in Florida and Illinois, Esposito said.

Now that there isn't a New Jersey center, customer service employees lose touch with New Jersey, he said. Issues of simply not knowing the state's geography can cause frustration with customers and union employees alike, Esposito said.

Employees would not see much benefit from the rate increase, Esposito said. He said the union employees are at odds with the company, which has increased out-of-pocket costs for some retiree's medical benefits, he said.

The union represents about 250 people -- including clerical, treatment facility operators and meter readers.

"We don't see the increase and profit passed on to our employees. Our concern has been the trend since it's been taken over. ... The tone seems to be increased profit at whatever cost," Esposito said.

Company officials made no mention of employee costs in its March 31 news release announcing the possible rate increase. The company cited other costs.

America Water Company officials did not return a phone call Wednesday.

Company officials say that since the last rate increase in July 2003, the company has invested more than $250 million to upgrade and replace its facilities, infrastructure and supply sources. Meanwhile, it has absorbed increased expenses, including 49 percent higher energy costs.

With the proposed rate increase, the cost of a gallon of tap water will still be less than a penny, Walter Lynch, president of New Jersey American Water, said in a written statement.

No one has filed paperwork in favor of the rate increase with the New Jersey Board of Public Utilities, Siddell said.

Four public hearings on the proposed increase have been scheduled statewide. The one in Central Jersey will be 1 p.m. July 19 in Westfield. The location of that meeting will be determined later this month.

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