NY American Water bills dead as part of state budget

An eleventh-hour effort to include rate relief and a new Nassau water authority in the state budget is dead, according to state officials and lawmakers, who say they will instead pursue the initiatives through separate non-budget legislation.

Both measures, which had stalled in the Assembly last week, ultimately never made it past Assembly opponents who expressed wariness about rate impacts for constituents outside of New York American Water’s Nassau territory. The company is in the midst of a sale to Liberty Utilities in a $607 million transaction that needs state approval.

"It is definitely not going to happen as part of the budget," said Assemb. Charles Lavine (D-Glen Cove). "It’s a very complicated proposed statute. It simply requires more attention than anyone is able to give it until we are finished with the budget."

Lavine said there’s "real support" for the new water authority, but it’s "something that should be discussed and fully reviewed by committees, and every Nassau representative should have an opportunity to weigh in."

Gov. Andrew M. Cuomo’s office had been working feverishly to complete a study of public-water options for the Nassau territory covered by New York American Water by April 1, so that the measures could be included in the budget. Concerns about rate relief also fueled the process, because American Water’s 125,000 Nassau customers face an average 26% rate hike May 1.

"Although the legislature didn’t adopt our plan in the budget, we stand ready to work with all stakeholders to reach a resolution before May 1 that protects Nassau residents and ratepayers and ensures clean and safe water for all," state Department of Public Service spokesman James Denn said in a statement.

State Sen. Jim Gaughran (D-Northport) and Todd Kaminsky (D-Long Beach), said they would quickly introduce bills to continue as separate legislation in the Senate.

"As soon as the senate is in session for non-budgetary issues, we can immediately enact it, which we think is important because the clock is ticking on that rate-relief proposal," said Gaughran, calling the looming 26% hike "a disaster." Gaughran added, "We’re hopeful the Assembly will take it up soon as well."

As reported in Newsday last week, Assembly members from Long Island, and particularly in Suffolk, had opposed the rate relief legislation, concerned that it would have required National Grid ratepayers to foot an average of $25 more a year in their bills to allow New York American Water or its successors exemption from a Nassau special franchise tax.

But even some Assembly members with constituents in Nassau had concerns after the Cuomo Administration offered to limit the potential impact to just National Grid customers in Nassau.

"It’s obviously very frustrating that real rate relief for water ratepayers couldn’t be accomplished in the budget," said Kaminsky. "The senate was and is still prepared to act. We are going to continue pushing forward."

Ratepayers and their advocates weren’t pleased both bills were derailed.

"It’s shocking to me these politicians would ignore the inequities of this situation," said Lloyd Nadel, a Glen Head attorney who represents the Glen Head Glenwood Landing Civic Council, a big backer of public water for the Sea Cliff region. "It’s taxation without representation." He said he applauded efforts by the PSC and Gaughran to provide rate relief and a separate bill for a public water authority but said, "If it doesn’t pass by June I don’t know what we’ll do."

"At all levels of government it’s a failure and it’s unacceptable," said Dave Denenberg, co-director of watchdog group Long Island Clean Air, Water, Soil. "I would hope the Public Service Commission can step in to give us rate relief immediately."

Also not expected to be included in the budget is a measure proposed by the Cuomo Administration that would have allowed LIPA to extend borrowing under its Utility Debt Securitization Authority up to the existing $4.5 billion cap, after old borrowings are retired.

Senators had attempted to include state comptroller authority for LIPA as part of that bill, but the effort wasn’t successful, senators said.

The budget is expected to include a new measure that would incorporate buy-American and prevailing-wage language for green-energy generation projects such as solar arrays over 5 megawatts that uses renewable energy credits from the state.

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.