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Report prompts review by Nassau DA of complaints against NY American Water Corp.

The Department of Public Service cited "intent to deceive" in failing to disclose property tax errors that led to $281,000 in overcharges for customers in Sea Cliff district.

Nassau District Attorney Madeline Singas, whose office is

Nassau District Attorney Madeline Singas, whose office is reviewing public complaints about New York American Water Corp.   Photo Credit: Charles Eckert

Nassau District Attorney Madeline Singas’ office is reviewing public complaints about New York American Water Co. following revelations in a state report that company employees sought to deceive regulators during rate-hike proceedings that sent water bills soaring.

A spokeswoman for the district attorney’s office said the matter was “being looked into and we’re aware of what’s being asked.”

“We’ve received calls from the public and are reviewing the allegations,” said the district attorney’s spokeswoman, Miriam Sholder.

A report released June 29  by the state Department of Public Service found New York American Water’s rates and regulatory team “knew of the material errors” in its property tax calculations tied to the requested rate hike in the Sea Cliff water district when the company filed for an increase in 2016. But, the report said, employees “failed to disclose that information in rate proceedings” before the state Public Service Commission. The PSC ultimately approved the rate increase amid continued assurances that the tax figures were correct.

In the report, the Department of Public Service cited company employees’ “intent to deceive” in failing to disclose errors in property tax calculations that led to customer overcharges. In the end, the report noted, it was the company’s senior management and legal counsel who admitted the errors to Department of Public Service staff in December 2017, after the rate case had concluded.

New York American Water overpaid about $2.3 million in property taxes, leading to customer overcharges of about $281,000. Sea Cliff district customers will receive $65 credits pending state approval.

In the report’s aftermath, lawmakers have called for investigations and more oversight of the water company.

“I am calling upon both the Nassau County district attorney and New York’s attorney general to launch a criminal investigation and convene a special grand jury to ensure this company, and the responsible employees, are held accountable for these actions as a whole,” Assemb. Michael Montesano (R-Glen Head) said earlier this week.

State Sen. John Brooks in a statement called for “immediate state oversight” into New York American Water.

A spokesman for New York American Water said: “We do not comment on potential or pending legal matters. However, we have and always will cooperate with any government inquiries.” 

David Denenberg, a former Nassau legislator who is co-director of watchdog group Long Island Clean Air Water and Soil, which has been pressing the company and the state on property tax questions related to the rate case, sent a letter Friday to two U.S. attorneys requesting a federal investigation into the matter.

“I can’t confirm or deny any investigation,” said a spokesman for Richard P. Donoghue, U.S. attorney for the Eastern District of New York.

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