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State extends time for proposals for public takeover of NY American Water

New York American Water had expected to finalize

New York American Water had expected to finalize its $607 million sale to Liberty Utilities by the "latter half" of 2020.  Credit: Danielle Silverman

The Public Service Commission on Thursday extended until Oct. 15 the period for municipalities and authorities to submit plans for a possible public takeover of all or part of the New York American Water.

The move gives breathing room for several municipal entities to further assess or solidify plans to take over parts of the privately owned water system. New York American Water had expected to finalize its $607 million sale to Liberty Utilities by the "latter half" of 2020. 

Several ratepayer and advocacy groups had requested an extension, noting that efforts to municipalize are under review or are being pursued by several groups, including the Massapequa Water District and the Village of Sea Cliff, which requested the extension. 

The unexpected sale of New York American Water, which includes about 120,000 customers in Nassau County, follows years of ratepayer revolt over the company's spiking customer bills and state investigations of rate-case irregularities by the company.

In extending the deadline for proposals beyond its initial Aug. 3 date, the PSC denied New York American Water and Liberty Utilities' request to limit further deadline extensions, to comment on the state's request for takeover proposals. 

In requesting the extension, the ratepayer group North Shore Concerned Citizens, which has advocated for a joining of the Sea Cliff district with the Jericho Water District, (currently under a feasibility study), also noted overtures about a possible takeover by the Suffolk County Water Authority and Hempstead Town. 

In a statement, Suffolk County Water Authority Chief Executive Jeffrey Szabo said State Sen. John Brooks "has approached the Authority about taking over New York American Water.  However, at this point we haven’t been provided enough information to comment further.” 

Hempstead Town spokesman Greg Blower said the town is reviewing previous studies it commissioned to examine the prospect of taking the water system public. 

“While two separate studies did not indicate meaningful rate cost savings could be achieved, the Town of Hempstead is taking another look at the most recent study, which was conducted in 2016, with an open mind,” he said. “At the end of the day, the overriding consideration remains whether a public takeover of this water company can provide genuine ratepayer relief.”

A spokesman for New York American Water reiterated a previous company statement saying the "fastest path to rate relief for our customers is addressing the property tax burden, not saddling customers with additional taxes to pay for a public takeover." 

David Denenberg, a co-director of consumer advocacy group Long Island Clean Air, Water & Soil, disagreed. 

"New York American Water saddles us with record profits for its shareholders and 100 percent of their tax burden while providing substandard service," he said. "A public takeover is the only solution."