The Public Service Commission has extended the deadline by which local municipalities and authorities can submit proposals for a public takeover of New York American Water, which could halt the company’s $608 million private sale to Liberty Utilities. A petition calling on Town of Hempstead officials to submit a plan has reached more than 1,000 signatures.
The PSC began soliciting plans on June 22, before New York American Water’s July target date for the sale. If the private sale were to prevail, water service for nearly 120,000 residents across three districts in Lynbrook, Merrick and Sea Cliff would be handed off to Ontario-based Liberty.
Municipalities and authorities have until Oct. 15 to submit takeover plans.
The sale to Liberty was announced in November after years of criticism of NYAW by customers, lawmakers and watchdogs over rate hikes, spotty water service and infrastructure management. Merrick-based advocacy group Long Island Clean Air Water and Soil had urged the PSC to hear plans for a public takeover, arguing that service woes would continue if the sale were to proceed.
“You can’t have a situation where 80 percent of the county is served by public water — tax free — and 20 percent are stuck with a private water monopoly and pay taxes for private water,” said Dave Denenberg, co-director of LICAWS. NYAW has reaped profits “on the backs of Nassau County’s private water ratepayers.”
Town of Hempstead officials declined to follow through with a public takeover of NYAW’s local assets — which would add to the town’s six existing water districts — based on the findings of a 2014 and a 2016 study. According to spokesman Greg Blower, those studies “did not indicate meaningful rate cost savings” for customers.
Denenberg argued that the findings were erroneous, however, and that a public entity’s tax-exempt status would result in actual savings — the study conducted by the Water Authority of Southeast Nassau County in 2014 did not account for tax-exempt status, he said.
Blower said the town is looking again at the most recent study “with an open mind.” “At the end of the day, the overriding consideration remains whether a public takeover of this water company can provide genuine ratepayer relief,” he said.
At press time on Tuesday, a petition on ipetitions.com declaring “The time to act is now!” had received more than 1,000 signatures, with dozens of comments in support of a public takeover. “There is no equity in the current system,” wrote one NYAW customer. “We need a public takeover of American Water and not a sale to another private entity.”
LICAWS directors Denenberg and Claudia Borecky plan to bring the petition to the attention of town officials, in addition to another 4,000 paper and online signatures, letters and comments from NYAW ratepayers, Borecky said.
NYAW external affairs manager Lee Mueller said in a statement the sale to Liberty is “in our customers’ best interests,” and a sale to a public entity would “take several years, cost taxpayers millions of dollars and lead to gaps in service.”
The inequitable tax system that saddles NYAW customers with property tax payments creates the burden on ratepayers, and should be removed, Mueller added. In another statement, Mueller said property taxes account for “33 to 59 percent of customers’ bills.”
“We have to consider whether or not a natural resource that is required for life itself should be taxed at all,” said State Sen. John Brooks, a Democrat from Seaford. “I don’t think it should be.”
Brooks has been critical of the inequitable tax system and has pushed for a public takeover of NYAW, arguing that the PSC “has to consider whether it’s in the best interest of the public to continue to operate the way we have” under a private water company.
Brooks said he will send a letter to the PSC questioning the sale and whether the $608 million price tag is a “fair, realistic value.” He has also been considering legislation that would allow the Suffolk County Water Authority — a public entity — to absorb Nassau’s service areas.
Other public water districts are eyeing acquisitions of neighboring NYAW operations, such as the Massapequa Water District, which may submit a plan to purchase NYAW’s customers and infrastructure in East Massapequa. On the North Shore, Sen. Jim Gaughran, a Democrat from Northport, has introduced legislation to establish a water authority in the Sea Cliff district.
According to its solicitation, the PSC seeks to “determine if the transfer to Liberty would be in the public interest, which could include considering viable potential alternatives.”
Submissions must answer which “portion of the [NYAW] system” — for example, customers and/or infrastructure — may be acquired in a public takeover and why the acquisition is in the “best interest of ratepayers.”