Gov. Andrew Cuomo announced legislation on Oct. 28 calling for the state to examine the feasibility of a public takeover of New York American Water’s infrastructure in Nassau County. The bill would require a study by the state Public Service Commission to be conducted by April 1.
The legislation would also call for steeper penalties for utilities with a record of poor responses during emergencies such as storms. This, officials said, would force utilities to be more accountable for their actions.
NYAW President Lynda DiMenna said that a PSC study would reveal that the private utility’s maintaining control of the North Shore’s water infrastructure would be more beneficial for area ratepayers than a public takeover. “We believe a study would demonstrate that we can best deliver safe, reliable water service to our customers,” DiMenna said in a statement, “especially given our excellent response to Tropical Storm Isaias and Superstorm Sandy, our water quality compliance record where all federal/state standards are continuously met and unparalleled investment in aging water infrastructure. The study would also demonstrate that the special franchise tax unjustly placed on our customers is the real issue impacting affordability.”
State Sen. Jim Gaughran authored a bill this summer that would establish a public water authority on the North Shore. The Senate passed it nearly unanimously in July, and Gaughran was chosen as the prime Senate sponsor of Cuomo’s bill. The governor’s legislation, he said, would be a “game-changer” because it would hold utilities more accountable.
“I believe this is exactly what we need as it relates to New York American Water,” Gaughran said. “I think it’s the beginning of the end for New York American Water in terms of continuing as a private entity providing service for people in Nassau County.”
State Assemblyman Charles Lavine, who has worked alongside Gaughran and Cuomo on the new bill, said that water utilities should always be publicly owned. “Water is such an essential feature,” Lavine said. “It’s fundamental to life itself, and it has always troubled me that anyone would want to make a profit on the delivery of water to our citizens.”
Gaughran said the legislation is especially important right now because it would establish how much the public has to pay to take over a private utility. NYAW agreed to sell its New York infrastructure to Liberty Utilities for roughly $608 million last November. The sale has yet to be approved by the PSC.
Additionally, Gaughran said, the bill would establish a state policy that if a sale were to go through, private investors would be entitled to recoup only their initial investment and whatever they spent on infrastructure afterward.
Gaughran said that Cuomo moved to have the PSC look into the feasibility of a public takeover because of the large disparity in payments between the Sea Cliff Water District and the neighboring Jericho district, with some in Sea Cliff paying nearly five times as much. Cuomo, Gaugh-ran said, had a clear understanding of the changes that were needed on the North Shore, and across Nassau County.
“I think it is the beginning of a process that I’m very hopeful will help some of the people I represent who have been economically harmed by paying exorbitant water bills,” Gaughran said.
Lavine said that NYAW’s monopoly in the Sea Cliff Water District makes it impossible for the average citizen to challenge any changes the company makes. Cuomo’s legislation would help give residents a voice in what should be done with their water, he said.
Agatha Nadel, director of the public water advocacy group North Shore Concerned Citizens, shouted with joy when she got news of Cuomo’s legislation. “This is an absolute game changer for us in this fight,” Nadel said, “and having the governor’s support along with Senator Gaughran and our assemblymen” — Lavine and Michael Montesano — “is absolutely huge.”
Sea Cliff Mayor Edward Lieberman said that Cuomo acknowledged the merit of ratepayers’ complaints after the village filed suit against NYAW in September 2017, claiming “unreasonable” rate increases for Sea Cliff residents. This is the first time, Lieberman said, that Cuomo has addressed the issue of a public takeover in a legislative forum.
“Important to us in Sea Cliff is his apparent endorsement of municipal water and the taking over from private corporate enterprises,” Lieberman said. “The mechanics of how that will be achieved have yet to be seen, but the governor is acknowledging the possibility of it through feasibility studies and appropriate legislation to accomplish the goal.”
Village Administrator Bruce Kennedy, who is also president of North Shore Concerned Citizens, said that the new bill may be the only way to establish a new water authority. “Conceptually, I’m 100 percent supportive of it,” Kennedy said. “It just goes to what I’ve been saying for six years now, and that’s that our water bills are astronomically high right now because of greed, not because of any other reason.”