State commission approves water rate hike

Residents of the Towns of Hempstead and Oyster Bay will see their water bills rise. The New York State Public Service Commission approved a three-year rate hike plan for Aqua New York in a unanimous vote on Tuesday.

According to the plan, which will take effect Feb. 6, Aqua customers will see their water rates increase 9.14 percent in the first year, 1.57 percent in the second year and 1.95 percent in the third year. The average customer's bill in the first year will rise from $593 to $643, according to the PSC.

A big part of the rate increase is due to property taxes that Aqua New York must pay. Gerald Lynch, an administrative law judge with the PSC who presented Aqua's proposal to the commission, noted that taxes will account for 36 cents on the dollar in the new billing period.

Nassau County Legislator Dave Denenberg, a Democrat from Merrick, who has long spoken out against a rate increase for Aqua, expressed outrage that its plan was approved. "It's appalling that the Public Service Commission always approves rate increases to monopoly suppliers of a necessity," he said. Aqua is "making record profits, and the Public Service Commission is justifying increases based on increasing costs when, bottom line, Aqua's never made more money."

The commission, which held four public hearings in recent months, noted residents' outcry against the rate increases, saying that nearly 3,000 comments were received from among Aqua's 45,000 ratepayers in southeast Nassau.

Lynch said that many of the comments concerned a possible public takeover of Aqua locally, with many saying that rates should be kept low to encourage Aqua to sell to a local municipal entity. Lynch, however, said that the commission had no authority to help facilitate a public takeover of Aqua.

Last week, Town of Hempstead Supervisor Kate Murray, a Republican from Levittown, announced that the Towns of Hempstead and Oyster Bay were appointing a task force to begin exploring the possible local takeover of Aqua New York. The task force is charged with investigating whether the dormant Southeastern Nassau County Water Authority is still in effect, and if it is not, ways to resurrect it. In the 1990s, the authority had explored the possibility of taking over New York Water, which is now Aqua.

While the Public Service Commission has no authority to help facilitate a municipal takeover of Aqua, Commissioner Patricia Acampora from Suffolk County said she was still interested in trying to help ratepayers, asking questions of Lynch.

"I just wanted to know if there was a mechanism to make things more beneficial to the customers in possibly creating a water authority," Acampora said. "I really think if this is something that elected officials could do to benefit the customers, that they should try to do something there in Nassau to make the playing field level."

Because Aqua must pay taxes that a municipal water provider would not have to pay, "the customers are not really getting a fair shake," she said.

Despite concerns for ratepayers, the commission concluded that rates must rise because of property taxes, as well as capital, pension and production costs, which include electricity and chemical treatments.

"Ensuring the company's rates reflect no more than the reasonable costs of providing water service are among the most critically important aspects of our review," said Commission Chairman Garry Brown. "While we are always reluctant to adopt a rate increase, especially during times of economic difficulties, ignoring the fact that rates must go up to adequately meet service costs is not a reasonable option because that will ultimately reduce service quality and reliability."