Gov. Andrew M. Cuomo has directed Rory I. Lancman, special counsel for ratepayer protection at the state Department of Public Service, to start a municipalization feasibility study for New York American Water Company, Inc., Long Island’s largest privately-owned water company.
“For far too long, the 120,000 customers of New York American Water on Long Island have been plagued by exorbitantly high rates for water – this simply cannot continue,” Cuomo said in a statement released Wednesday. “New York is immediately launching an effort to thoroughly study all options to reduce customer costs for this vital necessity and a basic right, including a public takeover. New Yorkers deserve access to clean, safe, and affordable water and we are going to pursue every avenue to make that happen.”
On the North Shore, New York American Water covers the Glen Head and Sea Cliff areas in addition to East Rockaway, Roosevelt, Bellmore and parts of Merrick on the South Shore. American Water has about 124,000 customers system-wide, including about 120,000 customers on Long Island alone.
The company has been criticized by consumers in the past for surging water rates, a result of property taxes that public utilities are not required to pay.
As reported in Newsday in 2017, one public forum at a Glen Head Middle school attracted displeased consumers who voiced support for the idea of turning the company into a public utility.
Nassau County Legislator Delia DeRiggi-Whitton criticized the company last October for ignoring a cost-effective approach to a water treatment project in Glen Head that added $1 million to its cost.
The state is currently reviewing the sale of the Merrick-based New York American Water to Liberty Utilities Co., another private utility.
The proceeding has triggered strong local interest in reviewing options for a potential public takeover of the system. Department of Public Service CEO John B. Rhodes said the governor had taken an interest in it as a possible solution to “this pressing problem of high-cost water service for these consumers.”
“One of the greatest consumer benefits of a public takeover is that the utility would become tax-exempt, which would lower costs for consumers,” Rhodes said. “Lowering the cost of service is of prime importance to the department.”
“Governor Cuomo is leaving no option off the table when it comes to protecting ratepayers, and that includes potentially municipalizing all or part of New York American Water Company on Long Island,” Lancman said in a statement. “The results of our analysis will help the Governor, the Commission, legislators, local government officials, and customers make an informed decision on how best to reduce water rates and provide safe and reliable drinking water in the long-term.”
The study being conducted will include opportunities for public comment and public hearings.
Cuomo included a provision in his utility reform legislation introduced in November that requires the issuance of a study by April 1 on the feasibility of a public takeover of American Water and directed the department of public service to begin the study immediately.
