By Kathleen (Kip) P. Cherry, PP, AICP • Conservation Chair, Central Jersey Group
Much has been said about the sharp rise in electricity and gas rates, but water rates are also going up, and it is important to understand what’s causing this. Essential water utility upgrades and higher water demand are the chief drivers.
Many water utilities in the New Jersey–Pennsylvania area can no longer postpone needed expenditures for maintenance and to comply with new environmental regulations. In Bucks County, for instance, where utilities have expanded aggressively, as in other areas of suburban Philadelphia and New Jersey, there has been considerable press coverage of efforts by larger water utilities to purchase smaller utilities. These smaller utilities are being required to make costly investments to conform with new water regulations. Some have agreed to be purchased by a larger utility because they don’t have the capital or personnel to handle this.
Among new water-related regulations are those meant to control PFAS (per- and polyfluoroalkyl substances), a class of toxins known as “forever” chemicals. Many water utilities have announced that they are preparing to add PFAS removal as part of their treatment. This would include removal of PFOS (perfluorooctane sulfonate), a type of PFAS used in firefighting foams and water/stain repellants. These chemicals are widely used in industry, but they are increasingly proving to be a danger to human health.
At the same time, local water authorities may be subject to Environmental Protection Agency standards for the taste, smell, and appearance of the water they supply.
The PFAS/PFOS treatment process uses advanced technologies such as granular activated carbon (GAC) and ion exchange resins that remove PFAS from water. The PFAS molecules basically stick to carbon and ion exchange resins. Membrane systems (reverse osmosis) are also used. These are highly effective in filtering out PFAS.
New Jersey American Water, the largest purveyor of drinking water in Central New Jersey, had outdated water filters at its Raritan-Millstone Treatment Plant and has undertaken a pilot project to install PFAS filters at the plant to conform to new EPA regulations. Such treatment upgrades are costly and there are additional operating costs, which include disposing of the spent carbon, potentially at a Resource Conservation and Recovery Act hazardous waste site depending on toxin severity. New Jersey American Water in January filed a rate increase request with the state Board of Public Utilities to support $1.4 billion in water and wastewater service investments.
Increased water consumption is also a cause of rate increases. Data centers are a new major challenge. The computation equipment in data centers creates massive amounts of heat that must be dispersed with air or water cooling. Data centers that use water require large amounts of water, putting pressure on local water systems. Proposals for recycling water have potential, but because of evaporation a considerable amount of water is unrecoverable. Up to 70% to 80% of water in evaporative cooling systems can be lost to the atmosphere. Large data centers can consume up to 5 million gallons a day, according to the Environmental and Energy Study Institute.
Further, the Potomac-Raritan-Magothy (PRM) aquifer system, which extends across New Jersey, Maryland and Virginia, is a critically stressed, heavily pumped water source. In the NJ Coastal Plain PRM is facing significant declines in water levels and rising risks of saltwater intrusion. Continued development is increasing demand, leading to long-term sustainability concerns. Regional groundwater levels have dropped significantly, moreso in places where water is being removed most vigorously. These “cones of depression” extend 100-200 feet below sea level in some areas.
Data indicate that more than 50% of wells sampled in this aquifer system had iron concentrations exceeding “secondary” drinking-water limits, meaning not a health threat but concerning nonetheless. Meanwhile, volatile organic compounds and pesticides were detected, especially in the upper and middle aquifers closer to ground level.
The US Geological Survey and state Department of Environmental Protection are actively studying the system to evaluate sustainability. Excessive pumping from this aquifer system could lead to further environmental damage and a diminished water supply.
As of early May 2026, New Jersey was under a drought warning, due to below-average rainfall in late March and early April. Residents were advised to use water sparingly. According to the Rutgers NJ Weather and Climate Network, while precipitation deficits did not significantly worsen in early April, the state was still struggling with long-term, below-normal precipitation, making consistent, statewide rainfall necessary to improve conditions. Key water reservoirs were below long-term averages and were not adequately replenished by winter snowfall.
In conclusion, large water-consuming projects before planning boards should be carefully evaluated against the water resource goals of the master plan. Similarly, designated Areawide Planning Agencies (APAs) are required by law to consider a project’s impact on the applicable Water Quality Management Plan as part of the approval process. New Jersey has APAs covering the entire state. These regional and county-level agencies were formally designated in the 1990s during the Whitman administration to implement Clean Water Act planning requirements and strengthen water resource protection.