In Monroe Township, that means 274 citations will be dismissed - about 7 percent of the 3,788 red-light-camera violations issued in the township this year, said Kevin W. Heydel, the township's business administrator.
A still-incomplete tabulation by state officials shows 666 tickets affected in Gloucester Township, 1,305 in Deptford, and 184 in Glassboro.
Charles Territo, a spokesman for ATS, said a computer server setting was changed during an upgrade and resulted in the violation notices not being mailed.
"It's not a problem we've experienced before, and we probably never will again," Territo said.
The 17,000 tickets would have generated $1.44 million in fines if all had been paid. About half of the revenue goes to the towns, with the rest to ATS, the state, and to counties.
A critic of New Jersey's experiment with red-light cameras, Assemblyman Declan O'Scanlon (R., Monmouth), said the error was an example of why the five-year pilot program should not be continued after it expires Dec. 16.
"This wasn't five or 10 or even a couple of hundred instances. This total breakdown affected almost 17,000 motorists," O'Scanlon said.
"These companies incessantly tout the supposed accuracy and consistency of their systems," he said, "when the only thing consistent about the camera company representatives is their blatant misrepresentation of what the equipment does and how accurately it does it."
O'Scanlon said ATS should pay all costs of the failure.
"We will work with each customer to decide how best to remedy any negative financial impacts related to this issue," said ATS spokesman Territo.
ATS operates traffic cameras at about half of New Jersey's 76 intersections that are equipped with them. Another company, Redflex, which operates cameras in the other towns, did not have the same problem.
The cameras are installed in 25 cities and towns around the state.
In addition to the four South Jersey towns, other affected municipalities are Jersey City, Palisades Park, Wayne, Linden, Rahway, Roselle Park, Union, East Windsor, Lawrence Township, East Brunswick, Piscataway, Woodbridge, and Pohatcong.
The red-light camera program, which began in 2009, has experienced technical problems before. In 2012, it was suspended for a month after officials determined that 63 of the cameras were not tested to ensure the yellow lights were timed in accordance with the law.
The program also has been the target of legal challenges that claim the yellow lights don't give motorists enough time to safely stop. ATS reached a $4.2 million settlement in 2013 with nearly 500,000 motorists ticketed in New Jersey.