Assessing the Affordability of Water and Sewer Utility Costs in New Jersey

This report, Assessing the Affordability of Water and Sewer Utility Costs in New Jersey, reviews various methods that have been or could be used to evaluate the household affordability of drinking water and sewer utility costs in New Jersey. It provides a preliminary assessment of household financial stress using these methods, based on recent household income levels and estimated utility costs (2017/2018 rates) for households using 60,000 gallons per year as a common demand level. The report makes preliminary findings on household affordability based on the analyses and provides policy recommendations and ideas for additional research. This Phase 1 report was developed to provide background information for use by the Jersey Water Works collaborative and policy makers in selecting a consensus method for affordability analysis that can be used to establish baseline data for New Jersey communities.

This report is an initial step toward measurement of progress regarding the Jersey Water Works goals by establishing baseline measures for the following:

• Drinking water and sewer utility affordability for residential users.
• Level of financial stress facing water utilities, based on the fiscal capacity of ratepayers

This report provides an initial assessment of affordability calculation methods, levels of household stress using a variety of affordability indicators, ideas for improving the analysis through additional research, and a discussion of policy implications for the development of affordability programs.