N.J. Admin. Code § 7:19-15.2

Current through Register Vol. 56, No. 21, November 4, 2024

Section 7:19-15.2 - Criteria for pricing

(a) In the event an emergency transfer of water is ordered by the Commissioner, the price charged to the receiving system should be based upon fair compensation, reasonable rate relief and just and equitable terms as to not create a situation wherein the customers or owners of the supplying systems are subsidizing the transfer.

(b) Where an emergency transfer is ordered by the Commissioner which requires a reduction in the amount of water used by existing customers of the supplying system in order to effectuate the transfer, the price charged to the receiving system should be set at a level which will insure the fair recovery of all costs incurred by the supplying system as a result of the reduction.

(c) Where an emergency transfer requiring no such reduction is mandated, the normal bulk water rates for existing regular customers of the supplier should receive serious considerations in determining the price of transferred water, except that this should not apply, for example, where such bulk rates are for off-peak water.

(d) Where such rates have not been established, rates may, in appropriate cases, be set so as to achieve revenue levels to cover the following requirements related to the facilities utilized to produce and transport water to the emergency purchaser:

1. Operation and maintenance;

2. Depreciation;

3. Taxes or payment in lieu thereof; and

4. Return (original plant investment minus depreciation times the rate of return) or debt service.

(e) Any foreseeable additional cost attributable to a mandated transfer shall be borne by the buyer of the water.

(f) Price schedules may specify that rate adjustments may be made later if actual costs fall short of or are greater than expected.

(g) If existing agreement on water transfer rates and other terms has been reached by the purveyors involved in such transfer and approved by the Department, the above criteria (a)-(f) shall not apply.

N.J. Admin. Code § 7:19-15.2