The state is calling for a major restructuring of Trenton Water Works, the city-owned utility that supplies drinking water to more than 200,000 people in Trenton, Hamilton Township, Ewing Township, Lawrence Township and Hopewell Township.

A new report from an independent firm, commissioned by the New Jersey Department of Environmental Protection, found Trenton Water Works to be at “extreme high risk,” with deep, systemic problems that are impeding upgrades to its treatment system, replacing toxic lead service lines and generally providing the best possible customer service.

The DEP has maintained direct oversight of Trenton Water Works since late 2022, and regulators say they are confident the water is safe to drink. But the utility has been plagued with issues in recent years, marked by heated city council funding fights over contracts, multiple legionella outbreaks, a recent scandal over falsified testing records, and an ongoing limit-use advisory as ice in the Delaware River gums up the treatment plant.

But the DEP warns it can’t keep a hands-on approach forever, and says the only way to ensure long-term stability for the utility is by keeping it independent from Trenton and either creating a regional utility authority or a public-private partnership.

“Trenton Water Works doesn’t really suffer from a financial problem. It suffers from a governance problem. An operations and maintenance and management problem. And together, by making sure that every community has a seat at the table and that the water system is led always by studied water-sector professionals, free from political interference, that’s the path forward,” DEP Commissioner Shawn LaTourette told NJ Spotlight News.

The mayors of all five municipalities supplied by the Trenton Water Works have already come out in support of restructuring the utility, saying in a statement that the process has already begun and will accelerate over the next six months.

“We, the Mayors of TWW-serviced towns, agree that the status quo is not sustainable, and we believe that creating a new public utility, with governance that allows for greater operational independence and collaboration across municipalities, is a necessary step forward,” mayors Reed Gusciora of Trenton, Jeff Martin of Hamilton, Bert Steinmann of Ewing, Patricia Hendricks Farmer of Lawrence and Courtney Peters-Manning of Hopewell Township said in a joint statement.

Several potential paths forward for Trenton Water Works were identified in the report: maintaining the status quo, full privatization, creation of a regional municipal utilities authority, a special-purpose entity or a public-private partnership with the city of Trenton maintaining control.

Maintaining the status quo appears to be out of the question, and LaTourette said the state is not recommending privatization because local leaders in the area are uniformly opposed to that option. A regional approach with either a new authority or a special-purpose entity scored the highest marks in the report.

Creating a new regional authority would take an act of the state Legislature. LaTourette said that lawmakers in districts that include the utility’s service area have expressed support for regionalization.

“It is crucial for us to take these steps toward a long-term solution that will benefit all nearly quarter-million residents who depend on Trenton Water Works for safe, reliable drinking water at affordable rates,” Sen. Linda Greenstein (D-Middlesex), Assemblyman Wayne DeAngelo (D-Mercer) and Assemblywoman Tennille McCoy (D-Mercer) said in a joint statement.