One longtime critic of New York American Water, the private utility company that came under fire last year after rates skyrocketed in Sea Cliff and elsewhere, has a name for the company’s recent travails.
“We are calling it American Water-gate,” Claudia Borecky, co-director of a watch-dog group Long Island Clean Air Water and Soil, said Monday, “Because it’s a cover-up.”
That’s no hyperbole.
An investigation by the state Department of Public Service found that employees of New York American Water “knew of material errors” in property-tax calculations tied to a 2016 request for rate-hike increases in Sea Cliff — but “failed to disclose that information in rate proceedings” before the state Public Service Commission.
Last week, LICAWS forwarded the report’s findings to a judge in Albany, along with a letter arguing that the findings further bolster the group’s contention that the rate hike was improperly vetted and thus should be tossed out.
The case is pending.
Meanwhile, LICAWS has scheduled a news conference for Thursday, where civic groups, customers and a growing number of elected officials, are expected to — once again — push for some alternative to the private water company.
“We know we have to rebuild trust,” a company official said Monday. “We are committed to rebuilding trust.”
But that won’t be easy.
For three years, from 2013 to 2015, employees at New York American Water knew that property-tax calculations were wrong.
And the errors remained because utility employees resisted or ignored requests from the state Office of Real Property Tax Services — which received the flawed data — to review the information.
The problem began with an error on a spreadsheet in 2012..
As a result, the utility ended up paying about $2.3 million more in property taxes than it was supposed to — some $281,000 of which the utility passed on to customers in overcharges.
But even when New York American Water officials discovered the errors, the utility kept the information to itself. The report bluntly called it an “intent to deceive.”
And that failure to disclose continued, even as New York American Water officials appeared before the state Public Service Commission to request rate hikes for Sea Cliff and other service areas in Nassau.
The report notes, more than once, that it is a utility’s job to provide correct information — an assertion that should make any ratepayer question checks and balances in the state’s approval process.
“The company failed to disclose the principal driver of the tax burdens it was seeking to pass on to customers..,” the report noted. “The company blamed the large increases on capital improvements, the decommissioning of a power-generating plant, and higher than normal assessments compared to other parts of its system,” the report went on, “but did not mention that the company was responsible for three years of erroneous tax filings.”
In short, the company made a mistake, kept it quiet and customers made some overpayments as a result.
In December, 2017, company executives traveled to Albany to ‘fess up to the utility’s errors in person.
It was a start that’s since snowballed into customer requests for investigations into the matter to Nassau District Attorney’s Office, the U.S. Attorney’s Office and the New York State Attorney General’s Office.
And yet, the waters are roiling, because New York American Water ratepayers in Sea Cliff and elsewhere still are boiling— as they have every right to be.