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Industry group says public takeover of NY American Water would be a 'disaster' 

The Merrick offices of New York American Water.

The Merrick offices of New York American Water. Credit: Danielle Silverman

A water-industry trade group warned that a public takeover of New York American Water would be a “disaster” for taxpayers forced to pay a “crippling” debt load to buy the company out, but local residents looking for rate relief aren’t buying it.

Public officials from Gov. Andrew M. Cuomo and U.S. Sen. Chuck Schumer, both Democrats, to local supporters such as state Sen. Carl Marcellino (R-Syosset) and Assemb. Mike Montesano (R-Glen Head) have called a public takeover everything from a “real option” to a necessity in the wake of rate-hike irregularities and soaring bills for the company’s Nassau water customers.

Investigations or complaint reviews are underway by state Attorney General Barbara Underwood, state Comptroller Thomas DiNapoli, Nassau District Attorney Madeline Singas and Nassau Comptroller Jack Schnirman, as well as the Public Service Commission, which approved the higher rate last year.

A statement sent Monday to Newsday quoted Robert Powelson, president and chief executive of the National Association of Water Companies, calling the prospect of public water in American Water’s Nassau districts “a losing proposition for all involved.” (The company itself declined to respond to questions about a takeover.)

Powelson suggested the issue of public versus private water boiled down to one of “safety,” pointing to EPA data and “multiple studies” that showed privately owned water companies had “much higher compliance rates” than public water companies in meeting drinking water standards.

Powelson accused municipalities of keeping water rates “artificially low,” charging they were “seeing the consequences of this decision — failing water systems without the proper rate structure to guarantee the delivery of safe and reliable drinking water.”

American Water and 16 of its U.S. subsidiaries are “active” members of that association.

Residents and watchdog groups for the North and South Shores who are pushing for a public takeover of the system quickly pounced on the association’s arguments.

“This is typical spin from a lobbying group for big private water companies who are paid through profits reaped by monopolies controlling a necessity: water,” said David Denenberg, co-director of watchdog group Long Island Clean Air, Water and Soil, which has pushed for a public takeover of the privately owned districts for a decade and first brought tax irregularities in the company’s rate case to light.

“The math is simple,” Denenberg said. “Remove profits, multimillion-dollar executives and unfair taxes which are overcharged to just a few people and rates would be cut by 60 percent to 80 percent.”

North Shore Concerned Citizens, which is pursuing public water for 4,500 NY American Water customers in the Sea Cliff district, pointed to a separate study that found private water companies charged 58 percent more than public ones. They rejected the idea that debt to buy the company would be “crippling.”

“We would much rather have ‘necessary’ infrastructure decisions made by the local community and paid for by debt held by government . . . rather than by carpet-bagger investors in a private company only interested . . . guaranteed profits,” the group said in a statement.

Water, as a “necessary commodity” should be a “local community choice and controlled by the community it serves, not by some national for-profit company that clearly does not care about our community or the truth,” the citizens group said.

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