Ocean City Water and Wastewater Rates


When you turn on the tap, it’s easy to see what your water bill buys. What’s not as easy to see is what it takes to bring that water to your home and likewise carry the wastewater to the sewer treatment plant. And every time you make a water and wastewater payment, you help make it all possible.


This webinar below will walk through an example of an Ocean City bill, show how its calculated, and explain what the charges represent.


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New Jersey American Water is regulated by the New Jersey Board of Public Utilities (NJBPU), and rates are established based upon the cost of providing service. The cost of delivering safe, reliable water and wastewater service depends on a number of factors, including needed capital investments in the infrastructure as well as the cost to operate and maintain the water and wastewater system.


The majority of New Jersey American Water’s rates for water are the same across the state. Below are the water rates as approved by the

Water Service Charge

This fixed service charge is based on the size of the water meter and is due with each bill.

new jersey amwater water service charge

Water Usage Charge

This is based on the amount of water you use. The rate is $0.77752 per 100 gallons.

Distribution System Improvement Charge (DSIC)

The DSIC helps to fund improvements to the water delivery infrastructure, such as water service lines, mains and hydrants. Below are the DSIC charges effective April 29, 2023. The DSIC is updated approx. every six months. For current rates, or charges for larger meters, visit the Your Water and Wastewater Rates page.

new jersey amwater distribution system improvement charge

Purchased Water Adjustment Clause

To continue to provide its customer’s with reliable service across the state, New Jersey American Water supplements its surface water and groundwater supplies by purchasing water from other water suppliers. The company then spreads those costs across water customers, as approved by the BPU, to recover the expense. This is known as a pass-through charge and is adjusted annually, increased or decreased, to recover the company’s actual out of pocket expense. The current rate is $0.05477 per 100 gallons.


Below are Ocean City’s wastewater rates as approved by the BPU.

Wastewater Service Charge

The wastewater service charge represents a portion of New Jersey American Water’s fixed costs to operate and maintain the collection system and collect the sewage from the customers. The company transfers the collected waste to Cape May County Municipal Utilities Authority (CMCMUA) who treats, and disposes of the treated sewage. To help cover those fixed costs, each customer is billed based on their usage during the three “high usage flow” months of July, August and September or “Summer Quarter Consumption.” The total summer period usage is divided by 12 and is billed on each regular monthly bill the following year. The rate is $1.35000 per 100 gallons.

Wastewater Usage Charge

This is based on the amount of water you use. The rate is $0.23250 per 100 gallons.

Purchased Wastewater Surcharge

The Purchased Wastewater Treatment Adjustment Clause (PSTAC) charge, which is considered a pass-through charge, represents the cost New Jersey American Water pays to CMCMUA for treating all of Ocean City’s wastewater. This cost, recently at a level of $10.6 million annually, can vary from year to year. Therefore, the PSTAC rate is adjusted annually based on the actual flow and cost payable to the CMCMUA for the treatment and disposal of the waste.


Why does New Jersey American Water charge for the CMCMUA’s cost of service?

New Jersey American Water owns and maintains the collection system that is used to collect the wastewater from homes and businesses in Ocean City and then transfers it to CMCMUA. However, CMCMUA maintains the treatment plant, pumps and pipes necessary to treat and dispose of the treated sewage.

As such, New Jersey American Water, as per its contract with CMCMUA, is responsible to collect and charge for the entire wastewater process. Each of the municipalities or participants sending waste to CMCMUA follow this process and the costs paid to CMCMUA are based on the volume of flow they send for treatment.

Why is my wastewater service charge based on last year’s summer period usage?

CMCMUA had to build its treatment plant so that it can handle the influx of seasonal usage that occurs during the summer months. Every November, CMCMUA determines its costs for the coming year. They then allocate those costs to each of the participants, including New Jersey American Water, based primarily on the volume of flow each participant sends for treatment during the summer months (July, August and September) of the previous year. Therefore, New Jersey American Water utilizes the actual customer usage for the same period to structure and bill the service charge and PSTAC on the same basis. This helps to ensure that customers in Ocean City share proportionately in the CMCMUA’s cost of treating Ocean City’s waste.

Why am I billed for service when I am not there?

Water Service: The fixed service charge is billed each month for an active account even when the property is not occupied. If a customer does not use any water, then no usage charge will be billed.

Wastewater Service: The wastewater service charge and PSTAC are billed to New Jersey American Water customers based on usage during the three month summer period, however, instead of burdening customers with a large one time charge for wastewater service, New Jersey
American Water spreads the usage equally over 12 months. This is why customers receive a bill even when the property is not occupied.

How to calculate the wastewater service and PSTAC charges?

new jersey amwater calculate wastewater service

Is the Purchased Wastewater Surcharge new? It started showing as a line item on my bill in January 2021.

The Purchased Wastewater Surcharge (PSTAC) is not new; however, prior to November 2020, the PSTAC was combined with the wastewater service charge instead of being listed as a separate line item. Since it is a pass-through fee that goes to CMCMUA, we felt it was better to separate the two charges to provide better insight into what your bill goes toward.

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