Water company receives lower rate increase

PSC grants less than half requested

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The New York State Public Service Commission announced last week that it had lowered New York American Water Company’s requested rate increase, granting a first-year increase of $3.63 million — less than half of the $8.7 million requested by the company.

“The Commission has a statutory obligation to ensure the company’s rates were just and reasonable,” said Commission Interim Chairman Gregg C. Sayre. “Today’s decision gives the company less than half of what it initially sought while ensuring safe and reliable service.”

NYAM service territory covers 12 water districts that serves roughly 120,000 customers on Long Island.

As an effect of the rate decision, the typical annual residential bill in the first year in the largest districts will increase. For customers in the Lynbrook services area, which includes Malverne and parts of West Hempstead, annual rates it will go to $465.64, up from $456.55. The typical annual residential bill for the Merrick district will go to $250, up from $236.51. Annual bills for typical residential customers in Sea Cliff will be $821.82, up from $587.23. Meanwhile, the typical customer bills in the rest of the smaller water districts in SA1 will actually decrease.

The water company said in a statement that customers would receive additional information regarding rate details and a change to monthly billing in a future mailing from the company, as well as with their next bill. Beginning in June, New York American Water is transitioning customers who were formerly billed on a bi-monthly or quarterly basis to monthly billing.

The rate increase is effective June 1, 2017.

The Commission’s decision establishes two service areas to set rates. Lynbrook, Mill Neck Estates and several smaller upstate water districts will be one service area and Merrick and Sea Cliff will be another. The typical residential customer in these service areas use about 4,000 gallons per month, or about 48,000 gallons annually.

Escalating property taxes and increased spending on capital improvements to American Water’s water system were cited as reasons for the increase in rates. In regards to Sea Cliff customers, the increase was mostly due to higher local property taxes assessed to the utility and then passed directly onto customers.

Carmen Tierno, president of New York American Water, said of PSC’s announcement, “Over the last five years, New York American Water has made significant improvements to replace aging infrastructure and improve water quality for customers throughout our service areas. We remain committed to making needed investments in our water treatment and delivery system.”

The PCS’s decision also includes a program to incentivize the company to provide better customer service and a program to speed up the removal of customers’ lead pipe. To improve performance, American Water will be required to maintain target customer service performance levels. If American Water fails to meet established performance targets, it would be subject to a negative financial adjustment and any dollars associated with missing the targets would be deferred for the benefit of ratepayers.

The lead-pipe removal program requires that American Water shareholders fund up to $75,000 to replace a customer’s service line that is discovered to contain lead where American Water is replacing company-owned services in the area. The Commission also directs American Water to participate in an ongoing collaborative that is considering developing programs to provide financial assistance to low-income customers.

A copy of the decision may be obtained through the commission’s website, www.dps.ny.gov and entering case number 16-W-0259.