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State: New York American Water probed over rates in Sea Cliff

The company did not disclose “accurate property value assessments,” so more than 4,000 customers saw steep increase in water bills.

Agatha Nadel, of Glen Head, questions New York

Agatha Nadel, of Glen Head, questions New York American Water Company about her high water bills at a civic association meeting at North Shore Middle School on Aug. 9, 2017, in Glen Head. Photo Credit: Howard Schnapp

New York American Water customers in the Sea Cliff Water District will get some rate relief beginning in January after the company acknowledged it made a “significant” accounting error, a state regulatory agency said Wednesday.

The mistake led to the private utility’s properties being overtaxed by $1.7 million from 2013 to 2017, according to the state Public Service Commission, which learned of the error on Dec. 7, but only made it public now.

The commission — which in May approved a four-year rate increase based on the erroneous information — said it has launched an investigation into the company’s failure to “disclose accurate property value assessments” to the panel.

“We will hold New York American Water accountable if it failed to disclose all of the financial information that we as regulators needed when we set the company’s rates earlier this year,” PSC Chairman John B. Rhodes said in a statement.

Any potential penalties the utility may face are “to be determined,” said James Denn, a commission spokesman.

On May 18, the PSC approved New York American’s request to increase water rates across the state, including its 120,000 customers in Nassau County. The four-year hike sparked protests — especially in the Sea Cliff Water District, where some residential ratepayers saw their monthly bill more than double.

Bruce Kennedy, administrator of the Village of Sea Cliff, which has sued the PSC and New York American over the rate hikes, said for years he told company executives that its properties — for pipes, water towers and other infrastructure — were overvalued only to be ignored.

“We’re supposed to be celebrating the fact that we caught them stealing from us, and they’re going to pay it back?” Kennedy asked. “Something stinks here, and I hope heads roll.”

On Dec. 7, New York American notified the PSC that it had made a “significant accounting” mistake that led to its properties being over-assessed.

Carmen Tierno, president of New York American, said in a statement Wednesday that the company discovered the error while “performing a comprehensive property tax review in an effort to identify opportunities to reduce the cost of its service.”

Starting in January, the average New York American residential customer in Sea Cliff will see a 34 percent decrease in their monthly bill, according to the PSC. The commission said the average customer who paid $109.71 a month will see the bill drop to $72.05.

The 34 percent decrease, however, will only last until March 31, according to Denn. It wasn’t immediately known how the over-assessment will affect the remaining three years of the rate increase.

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