Amid outcry from residents and elected officials, New York American Water announced that it has postponed a rate hike that was set to take effect on Sept. 1. The decision came after the utility engaged in discussions with the Department of Public Service and decided not to go through with the increase amid the coronavirus pandemic.
The hike was originally slated for April 1, 2019, but was then delayed to April 1 of this year. At the height of the pandemic on Long Island, the utility delayed the price spike to Sept. 1, and now it is postponed further to Jan. 1, 2021.
“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 31-55 percent of their water bill by reintroducing tax relief legislation,” NYAW President Lynda DiMenna said in a statement.
DiMenna’s remarks reflected a sentiment echoed by Lee Mueller, the utility’s external affairs manager, who said last month that much of the increase is caused by state taxes, and noted that there has been recent legislation proposed in the State Senate to eliminate those special franchise taxes.
“The fastest path toward significant rate relief is reducing the unfair tax burden levied on our customers,” she 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. Taxes make up between 31 and 55 percent of our customer’s bills. Reducing that burden will quickly provide true rate relief.”
In addition to the rate year 4 increase postponement, the system improvement charge, scheduled to go into effect Aug. 1, and the revenue adjustment clause/ property tax reconciliation charge, scheduled to go into effect Nov. 1, were also pushed 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 Oceanside and Island Park, 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.
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.
Last month, 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.
In a letter to DiMenna, State Sens. Todd Kaminsky, John Brooks and James Gaughran called the planned rate hikes “inappropriate and insensitive,” since they are 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.