Amid an outcry from residents and elected officials, New York American Water officials announced they were postponing a rate hike that was set to take effect on Sept. 1. The decision came after the utility took part in discussions with the state Department of Public Service and decided against moving ahead with the increase as the coronavirus pandemic drags on.
The hike was originally slated for April 1, 2019, but was delayed to April 1 this year. At the height of the pandemic on Long Island, the utility delayed it again until Sept. 1, and now it is postponed until Jan. 1.
“In addition to the postponement, it is our sincere hope that the Long Island delegation takes action to unburden our customers from excessive taxes that make up 31 to 55 percent of their water bill by reintroducing tax relief legislation,” NYAW President Lynda DiMenna said in a statement.
DiMenna’s remarks echoed those by Lee Mueller, the utility’s external affairs manager, who said last month, before the hike was pushed back, that much of the increase is caused by state taxes, and noted that legislation recently proposed in the State Senate would eliminate those special franchise taxes.
“The fastest path toward significant rate relief is reducing the unfair tax burden levied on our customers,” DiMenna said. “. . . We pledge to work with the [Long Island state legislative] delegation to double down on their efforts and ensure that legislation is passed by both houses of the Legislature.”
In addition to postponement of the increase, a system improvement charge, scheduled to take effect Aug. 1, and a revenue adjustment clause/property tax reconciliation charge, scheduled for Nov. 1, were also delayed to Jan. 1. The rate increase postponement is applicable to all customers, including residential, commercial, fire service and irrigation accounts.
With new rates on Jan. 1, residential customers in the Lynbrook service area, which includes East Rockaway and Lynbrook, will pay a certain amount per 100 gallons that they use:
—The first 3,000 gallons will cost 49 cents per 100 gallons.
—The next 3,001 to 6,000, 67 cents.
—The next 6,001 to 15,000 gallons, 97 cents.
East Rockaway Mayor Bruno Romano said he was pleased that the price increases were delayed, and thanked utility officials, but also questioned the need to implement them next year.
“With the current situation which we are facing in East Rockaway, many families have lost their jobs, have been furloughed or had to take a substantial reduction in salary,” he said. “Therefore, New York American Water should not raise their rates at all.”
Lynbrook Mayor Alan Beach said he has taken an active approach to curtail future rate increases.
“I’m glad to see that New York American Water has postponed the rate increase,” he said. “The village has been working with the Town of Hempstead to see if there is an alternate solution to the excessive charges we pay for water supply.”
In March 2019, NYAW received approval from the state Public Service Commission to delay a planned 12.5 percent hike for customers in the Lynbrook service area. The action came amid a state investigation into the utility’s rate increases and heated public hearings. The increase was part of a four-year rate plan that was approved by the PSC and took effect in 2016.
While it was initially believed that a double-digit rate hike could be coming, the PSC announced in February that it was deferring a 27 percent spike that was slated for April and would instead plan for a 6 percent increase. By law, the utility must notify residents 30 days before any hikes are implemented.
In July, the Public Service Commission extended the deadline by which local municipalities and authorities can submit proposals for a public takeover of NYAW, which could halt the company’s $608 million private sale to Liberty Utilities. The PSC began soliciting plans on June 22, before the utility’s July target date for the sale. If the private sale were to happen, water service for nearly 120,000 residents across three districts in Lynbrook, Merrick and Sea Cliff would be handed over to Ontario-based Liberty. Municipalities and authorities have until Oct. 15 to submit takeover plans.
The sale to Liberty was announced last November after years of criticism of NYAW by customers, lawmakers and watchdogs over rate hikes, water service and infrastructure management. Residents and elected officials have also criticized the consistent rate hikes.
The delayed increase came after a letter to DiMenna from State Sens. Todd Kaminsky, a Democrat from Long Beach, John Brooks, a Democrat from Seaford, and James Gaughran, a Democrat from Huntington, which called the impending increases “inappropriate and insensitive,” because they were planned to be implemented during the pandemic, when many people are struggling. They noted that New York’s current unemployment rate is 15.7 percent, up from 3.7 percent in February, and that while many businesses reopened after taking quarantine measures, many remain unable to do so.
Andrew Garcia contributed to this story.