New law offers temporary reprieve for some customers with overdue water, sewer bills

Water and sewer utilities that do not participate in a payment assistance program for low-income customers are barred from shutting off service of customers in the red before October 1, under a new bill signed into law by Gov. Phil Murphy Wednesday.

Murphy’s signing of the bill comes as a deadline nears for New Jersey to use or lose $24 million in federal funding intended to erase residents’ 2021 water and sewage debt. The federal funding would have provided applicants with up to $8,000 to pay overdue bills.

But scores of residents could not access that aid because most utility companies in the Garden State didn’t sign up to participate in the state-administered program. A representative for the New Jersey League of Municipalities told lawmakers in January that utility companies hesitated to join the program because of various “flaws.”

The new law prohibits public and local utilities that don’t sign on to the program from enforcing liens for unpaid balances, charging interest on overdue amounts, or discontinuing service for people who owe them money before the program expires at the end of September.

Sen. Nilsa Cruz-Perez (D-Camden), one of the bill’s sponsors, said in a statement that people shouldn’t be left to choose between feeding their families or paying their water bills, “especially when there is a program designed to help.”

Nearly 144,000 New Jersey households served by privately owned utility companies owe $45 million in overdue water bills, according to state data from September. But as of late February only about 140 of 600 utilities statewide agreed to participate in the program to distribute the federal aid.

The state must return unspent funds back to the federal government by September.

The new law requires utilities to notify their customers about the program and share data regarding arrearages with the state.

To be eligible for the program, residents should be paying their water or sewer bills directly to the company and have a gross household income at or below 60% of the state median income, or $6,662 per month for a family of four. Applications are approved on a first-come, first-serve basis.

“This law puts a plan in place to encourage more water and sewer companies to engage in the state’s water assistance program. By boosting participation in the program, more eligible homeowners can receive assistance before we reach the September deadline,” Sen. Kristin Corrado (R-Passaic), another bill sponsor, said in a statement.