Senator seeks investigation of Aqua America

Bellmore-Merrick residents saw their water rates rise in January when the New York State Public Service Commission approved a three-year, 12.66 percent rate hike for Aqua New York, their water provider. The average customer's bill will rise from $593 to $643 this year, according to the PSC.

When U.S. Sen. Charles Schumer, a Democrat, heard from constituents about the rate hike, and a similar increase in December 2008 for towns in Westchester County, he and his staff began looking into Aqua New York and its parent company, Aqua America. Schumer said he became concerned that Aqua America may be misusing Drinking Water State Revolving Loan Funds from the federal Environmental Protection Agency, and last week he filed a request with the Government Accountability Office to conduct a review of Aqua America Inc.'s use of the funds.

DWSRF was established in 1996 "to make funds available to drinking water systems to finance infrastructure improvements," according to the EPA website. "The program also emphasizes providing funds to small and disadvantaged communities and to programs that encourage pollution prevention as a tool for ensuring safe drinking water."

Low-interest DWSRF loans are available for profit-making companies such as Aqua America, and grants are offered to non-profit utilities.

Schumer's letter stated that he was concerned that Aqua America was not following EPA protocol, and that DWSRF loans make up 5.68 percent of Aqua America's long-term debt. Schumer stated that use of DWSRF loans should reduce capital costs and therefore reduce customers' rates — and that, he said, was not the case with Aqua customers.

"Aqua America has repeatedly imposed distribution improvement surcharges as a means to increase rates, rolling in capital surcharges to rate increases, and then seeking additional surcharges once rate increases are approved," Schumer wrote in his letter to the GAO. "This appears to be inconsistent with the intent of the DWSRF program."

Donna Alston, Aqua New York's communications representative, said that Aqua has done nothing wrong. "Aqua New York has applied for low-interest loans —not grants and/or contributions — which are permitted and funded under the Federal Safe Drinking Water Act. The company has never been awarded any such loans," Alston wrote in an e-mail. She also emphasized that the January rate increase was the first since the spring of 2004, and she wrote, "Even with the full increase, customers will still be able to have a day’s worth of water delivered directly to their taps for $1.48 a day or about one-half cent per gallon."

In response, Mike Morey, a spokesman for Schumer, said that even though Aqua New York has not received federal loans, Aqua America, its parent company, has.

Comments about this story? DKrasula@liherald.com or (516) 569-4000 ext. 234.

Town working on water authority

In January, Nassau County Legislator Dave Denenberg, a Democrat from Merrick, called on the Town of Hempstead to reinstate the Southeastern Nassau County Water Authority. The authority, created under the New York Public Authority Law of 1991, allows for the creation of a special board of directors to evaluate the possibility of a public water district for the area.

Initially, town Supervisor Kate Murray believed that new legislation would be necessary to reinstate the authority, but in an April letter to Denenberg, David Levy, special assistant for the Town of Hempstead, explained that is not the case. In the letter, Levy stated, "Town officials are reviewing letters of interest and materials from people who wish to be considered for appointment to the authority." Town spokeswoman Susie Trenkle-Pokalsky said the town is still taking resumes and conducting interviews to establish the authority.