N.J. Stat. § 13:13-12.9
The Division of Water Policy and Supply of the Department of Conservation and Economic Development shall be empowered to sell water from the Delaware and Raritan canal and from the feeder of said canal, at wholesale, on just and reasonable terms and conditions and at just and reasonable prices, to persons, corporations, municipalities, municipal and district water commissions, for industrial, public, potable and other purposes upon application and after public hearing, provided that before such water may be used for potable purposes, purification and treatment shall be accomplished by the purchaser, subject to the approval of the State Department of Health. The division may, at its discretion, dispense with public hearing when the quantity of water applied for is less than one-half million gallons a day.
Nothing in this act shall affect the use of the canal and feeder for recreational purposes.
N.J.S. § 13:13-12.9