New Jersey’s Water Infrastructure Protection Act (WIPA), which was enacted in 2015, allows municipal water and wastewater utilities to enter into a long-term lease or outright sale of the utility assets to a capable owner and operator of a private (investor-owned), or public (government-owned) utility system. WIPA eliminated the requirement for a public referendum on the lease or sale of a municipal utility system if one of five “emergent conditions” is met, as certified by the New Jersey Department of Environmental Protection.

WIPA is a version of so-called fair-market-value (FMV) legislation. This legislation allows non-traditional methods for valuing utility systems, which artificially inflates the value of these systems to the detriment of customers. FMV legislation has been enacted in some form in recent years in numerous states around the country and it merits closer review from the lens of the customer.

As FMV legislation has emerged in more states, it has received increased scrutiny from legislators, consumer advocates and others as the true financial impact of these transactions on utility customers is becoming more widely understood.

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