ABSECON - Investor-owned utility New Jersey American Water has started construction on a $7 million plant to filter iron from groundwater it pumps, something the company says is to improve the appearance of the water.

The iron filtration plant at 534 New Jersey Ave., near Michigan Avenue in Absecon, will serve about 20,000 customers mostly in Absecon, Pleasantville, and Galloway Township, the Voorhees-based water utility said. When completed, the plant will produce more than 2 million gallons per day, New Jersey American Water said.

Iron in water is not considered a health issue but rather an aesthetic matter, said state Department of Environmental Protection spokesman Larry Hajna. High iron content can give water a rusty color or a metallic taste, according to the U.S. Environmental Protection Agency.

New Jersey American Water spokesman Richard Barnes said the plant will add four vertical pressure filters that have layers of sand and anthracite to remove iron from the groundwater it pumps. Barnes said iron in the water was a recurring issue in the area.

The utility also drilled a new well to draw water from the Kirkwood-Cohansey Aquifer, and is installing an emergency generator at the site, he said.

Its contractor, Stone Hill Contracting Co. of Doylestown, Pa., began moving equipment to the area in late May, he said. Workers there have built a backwash tank and are excavating the site for the facility that will be erected there. The plant should be operational by the end of the year, according to New Jersey American Water, a subsidiary of American Water and the largest investor-owned water utility in New Jersey.

"The ground water from the aquifer that supplies water to the Absecon area tends to be higher in iron, a natural mineral which causes some water discoloration," the utility said in a statement. "When the new treatment plant is complete, customers can expect high-quality, reliable water that is clearer and less susceptible of leaving mineral deposits."

The EPA classifies iron among its National Secondary Drinking Water Regulations of non-mandatory water quality standards, establishing them as guidelines for public water systems to manage them for color, taste and odor of their water, the EPA says on its website.

The federal standard for iron is 0.3 MG/L (milligrams per liter). New Jersey American Water tests from 2012 show iron content levels for the region ranging from "not detected" to 0.9 MG/L.

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