American Water fights rising tide of criticism

New York American Water officials promised not too long ago to restore customer confidence in the privately held utility.

The promise came in early July, after an investigation by the state Department of Public Service found that company employees intended to “deceive” state regulators during 2016 rate-increase hearings — which ended up significantly increasing water bills.

It’s August, and customer complaints about the company now are being scrutinized by the offices of Nassau County District Attorney Madeline Singas, Nassau Comptroller Jack Schnirman, state Attorney General Barbara Underwood and state Comptroller Thomas DiNapoli.

Requests by consumers to probe American Water also have gone to the U.S. attorney’s office for New York’s Eastern District. The office, as is its practice, will neither confirm nor deny what, if anything, federal prosecutors are doing in response.

Even Gov. Andrew M. Cuomo weighed in during a recent visit to Long Island, saying, “The basic charge of the attorney general is consumer fraud and I think this very well might have been a case of consumer fraud.”

He continued, “It’s incredible and it’s abusive and you have consumers who have no idea that the rates increased and then they get a bill in the mail that announces a new rate structure after they used the water — it doesn’t work that way. If you want to issue a new rate structure, you have to tell me before you do it, not after I’ve used the water.”

The issue, in brief, is that American Water customers on Nassau’s North and South Shore have been surprised by increases in their bills.

Sea Cliff customers, state officials determined, were billed a portion of property taxes that American Water mistakenly overpaid. The company then compounded the damage — and further damaged its credibility -- by waiting to disclose the error until after state Public Service Commission hearings on proposed rate increases.

That’s when the company said it would work to restore customer trust.

Then Newsday’s Mark Harrington filed a series of reports about customers across the utility’s service area who complained about surprises in their water bills -- some of which included charges exponentially higher than customers expected.

Some customers questioned the accuracy of new water meters.

In response, one New York American Water official noted that the problem could be water leaks, or that the older meters could have been undercounting water use. Another said a company review would include “an analysis of every customer that submitted an inquiry as well as a broader approach which will identify patterns.”

By then, local elected officials were calling for more oversight. Customers were calling for creation of a public water company. And county and state officials were beginning to launch their own investigations.

The company addressed  one customer’s water bill -- which had jumped from $28 to $48 per month to $1,971.09, by issuing an $18 credit. Initially, American Water had offered the customer a payment plan.

Earlier this month, American Water issued the results of a preliminary review of customer complaints from South Shore customers -- pinning higher bills to increased summer usage, coupled with a recently instituted “conservation rate.”

Weeks later, the state PSC ordered the company to refund $292,804 to Sea Cliff district customers as a result of American Water’s “gross mishandling” of its property tax filings.

The company’s problems aren’t over. Last night, New York American Water announced it had paused distribution of August water bills in the Long Island region as it works to get a handle on complaints about high bills.

The company had promised to review all customer complaints by the end of the month.

As for restoring consumer trust, more and more customers and local elected officials seem to be looking elsewhere for that — to public water.