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PSC postpones New York American Water rate hike at company's request

A rate hike for New York American Water

A rate hike for New York American Water customers was postponed Tuesday by the Public Service Commission. Credit: Danielle Silverman

The state Public Service Commission on Tuesday granted an emergency request by New York American Water to postpone September surcharges and rate increases, citing the "ongoing nature of the pandemic." 

The move postpones the hikes until Jan. 1 and provides a measure of relief to the more than 120,000 water customers served by the company in Nassau districts centered around Lynbrook, Merrick and Sea Cliff. Most of the charges and rate increases were scheduled to take effect earlier this year, but were postponed in light of the COVID-19 pandemic until September. 

The last in a series of four-year rate hikes scheduled to begin Tuesday is now postponed, as is a system improvement charge, as well as a separate surcharge to reconcile revenues and property taxes. The commission's order includes a make-whole provision allowing the water company to recoup revenue amounts it would otherwise have collected during the period.

In approving the Merrick-based water company's request, the commission's order cited the "tremendous impact on the state’s economy generally and New Yorkers’ individual ability to meet ongoing financial obligations."

The order, filed Monday afternoon continued: "Given these conditions, it is appropriate to act on an emergency basis to address NYAW’s petition, which is intended to provide temporary relief to its ratepayers while the state of emergency continues."

The company filing does not specify any anticipated impacts from the moves, but customers had been told to expect increases of at least $4 to $10 on their monthly bill in September. 

State Senators John Brooks (D-Seaford), Jim Gaughran (D-Northport) and Todd Kaminsky (D-Long Beach) had requested the delay in a letter last month, citing the continuing impacts of the pandemic. 

"This is a just and appropriate result," Kaminsky said Monday. "I have heard from countless Long Islanders who are desperate for people to understand their financial situation and to make things easier for them, and this decision certainly does that." 

He said the postponement also "gives us more time to figure out the situation with respect to having quality and affordable delivery of water," whether from a public or private entity. "This reprieve gives us more time to explore those options." 

New York American Water is in the process of being sold to Canada-based Liberty Utilities for $607 million, even as the Public Service Commission solicits proposals by state authorities and districts to municipalize all or part of the system

The Massapequa Water District has already submitted a proposal to take over the company's East Massapequa territory, while Sea Cliff and Hempstead Town are studying the feasibility of municipal takeovers of other parts of the company's system.

New York American Water has rejected the notion of taking the water system public, arguing the best way to lower rates is to relieve the company of onerous property tax burdens.

A spokeswoman for New York American Water didn't immediately respond to a request for comment. 

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