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State attorney general probes New York American Water

Gov. Andrew M. Cuomo said in Point Lookout that high water bills from the company may be the result of "consumer fraud."

Gov. Andrew M. Cuomo announced an artificial reef program that will help create a new marine habitat in twelve different locations off Long Island.  (Credit: Michael Owens)

The state attorney general's office said Friday it has begun a probe of New York American Water as Gov. Andrew M. Cuomo said on Long Island the company may have committed "consumer fraud" in sharply boosting some customers' water bills. 

"The basic charge of the attorney general is consumer fraud and I think this very well might have been a case of consumer fraud," Cuomo said at an event in Point Lookout.

"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," Cuomo said. "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." 

While Cuomo called on the attorney general to investigate the rate hikes, Amy Spitalnick, a spokeswoman for state Attorney General Barbara Underwood, said the office has already opened a probe. Spitalnick said the office opened a civil probe of the water company in July, and that it is  being conducted "under our civil consumer fraud jurisdiction." 

"The agency primarily responsible for utility rates is the PSC [state Public Service Commission]," Spitalnick said. "Our office opened a civil investigation earlier this summer and continues to look into the various issues, including these bills." 

 Cuomo administraton officials said Friday the administration was not in a position to know about the attorney general's probe.

Cuomo's comments and the attorney general's probe come as American Water customers on Nassau’s North and South shores have been calling for a public takeover of their water supply after complaints of high bills. 

State Public Service Commission officials on Thursday ordered American Water to refund $292,804 to Sea Cliff district customers as a result of the company's "gross mishandling" of property tax filings. Earlier this year, the agency found a $2.3 million tax overpayment by the water company resulted in $281,421 in overpayments by Sea Cliff customers. According to the PSC, although the company paid the $2.3 million, the vast majority was never billed to customers.

State Sen. Todd Kaminsky (D-Long Beach) said his office has received more than 400 constituent complaints about high water bills. PSC officials said the agency received more than 800 complaints from residents on the South Shore. 

This week, Nassau County Comptroller Jack Schnirman said his office was investigating county water charges from New York American Water after finding bills jumped sharply for at least two county parks this summer.

"Now that the governor has weighed in on the issue — it's a tremendous development — and there are a number of agencies that we are going to put pressure on to make sure rate payers get the relief that they deserve," Kaminsky said.  

In response to reporters' questions about American Water, Cuomo said Friday: "Consumers were abused in this situation and I'm going to stand up for them." 

In Point Lookout, Cuomo joined Kaminsky and other Democratic elected officials, including state Sen. John Brooks (D-Seaford); Nassau County Executive Laura Curran and Town of Hempstead Supervisor Laura Gillen for a boat ride to watch the lowering about 380 tons of concrete and steel from the demolished Tappan Zee Bridge and two vintage boats onto the artificial Hempstead reef, about 3 miles off Jones Beach.  

Installation of the new material marked the first time state officials have added to the artificial reef in more than 20 years, Department of Environmental Conservation officials said. The Hempstead reef is 744 acres — nearly the size of Central Park, officials said. 

The project is part of a $5 million effort to bolster six artificial reefs and expand fish populations around Long Island this year. State officials said it could boost the Island's diving industry. 

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