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New York American Water under fire for rate hikes

Customers could use less water, but still pay more


Even though New York American Water’s conservation rates were designed to reward customers for limiting water use, the utility’s deputy chief operating officer, Bill Varley, acknowledged at a public hearing on Aug. 9 that customers could be using less water than in previous years and still be paying more.

That was the case for Woodmere resident Pearl Bluth, one of many Nassau County residents who have seen their bills increase substantially. Bluth said that in 2016, she paid $177.87 for using 31,900 gallons of water, and this year she paid $245.25 for using 26,500 gallons — more than 5,000 gallons less.

“It is really obscene,” Bluth said.

Hundreds of residents came to East Rockaway Junior-Senior High School for the hearing, to find out why their water bills have skyrocketed. The meeting went on for over three hours.

Under NYAW’s new rates, which went into effect in April, customers are divided among four tiers based on how much water they use. Those in the highest tiers are charged more per gallon because they use more.

But many county residents who water their lawns find themselves in the highest tier. The higher rates are also a disadvantage for villages, Malverne Mayor Patty McDonald said.

“With only two months into our budget, it is projected [that] all village departments will be overexpended in their water bill budget lines due to the excessive rate increase,” McDonald said, adding, “The village cannot continue to function this way.”

The cost is passed along to village taxpayers, East Rockaway resident Dan Caracciolo pointed out. “We’re getting hit twice, or maybe more,” he said.

Customers’ bills are also affected by NYAW’s taxes, and the costs of its operations and capital improvement projects. Those projects increase rates even further for customers in the Lynbrook water district, documents from the state Public Service Commission show. Under the new rates, a customer in East Rockaway pays 43 cents per 100 gallons of water for the first 3,000 gallons used, while a customer in Merrick pays just 18 cents.

NYAW’s rates are also higher than those of other Long Island water companies. Jack McCloy Jr., of Baldwin, held up a sign saying that he pays more than $100 for about 11,000 gallons of water, while his mother pays only $8.03 in South Huntington, despite using the same amount of water. Similarly, Glen Head resident Agatha Nadel said that her neighbors, who are in the Jericho water district, paid $502, while she paid almost $2,500.

NYAW submitted its plans to increase rates to the PSC last year, after the state’s Department of Environmental Conservation requested that every water utility on Long Island devise a plan to reduce water consumption by 15 percent. According to Varley, the utility decided to create the tiers because under the old method of charging customers, those who conserved water would be paying the same rate as those who did not.

“It wasn’t really fair, because the people who were conserving weren’t really being rewarded and were sharing,” Varley said. “So that’s part of the genesis of the conservation rates.”

The PSC approved the rate hikes in June 2017. At the time, the agency’s utility supervisor, Tim Canty, said, NYAW’s base rates (excluding surcharges and taxes) were only supposed to increase by 5 percent. But State Sen. Todd Kaminsky, a Democrat from Rockville Centre, said that an analysis of the complaints his office received showed that NYAW’s base rates have increased by 135 percent.

Those discrepancies in costs and rates led many of the customers in attendance to call for an end to NYAW and the current PSC administration. “This group over here really does have to go,” McCloy said, pointing first to the representatives of NYAW, and then to the representatives of the PSC. “And if these guys thought the rate increases were 5 percent, then these guys have to go, too.”

State Assemblywoman Melissa Miller, a Republican from Atlantic Beach, said that those who attended the hearing did not get the answers they needed, and added, “We got way more disturbing information than I knew was out there.”

Sen. John Brooks, a Democrat from Seaford, and Kaminsky also said they would discuss options for rolling back the rate increases before they continue to soar over the next three years. A day after the meeting, Kaminsky met with Gov. Andrew Cuomo, who said he would refer the matter to state Attorney General Barbara Underwood’s office and request that a special investigator be appointed.

Representatives of the PSC said they would continue to investigate New York American Water to see if it had any systemic issues, and to determine whether it increased its rates beyond 5 percent because of surcharges and taxes.

“We’re going to audit the heck out of this,” said Tom Congdon, the PSC’s deputy chair.