Authority cites Liberty Utilities' 'lack of good faith' in talks on public water system

A state-sanctioned authority formed to advance public water on the north shore of Nassau County has accused Liberty Utilities of a "lack of good faith" in its mandated negotiations to sell off part of the company’s Long Island holdings.

In a letter to the state Public Service Commission on July 17, the Water Authority of the North Shore said it believes any future negotiations with Liberty "will be fruitless," given foot-dragging by the company in response to a prior offer for the system.

James Denn, a spokesman for the PSC, said the agency "received the letter on July 24 and is reviewing" it.

WANS, as the authority is known, was formed by an act of the State Legislature in 2023 following the PSC-sanctioned sale of the former New York American Water to Liberty Utilities for $607 million. Liberty agreed to participate in good-faith negotiations and a prescribed timeline to sell elements of the Nassau service areas with entities that could gather the finances and effectuate a sale.

Gov. Kathy Hochul in 2021 signed the bills to create two new Nassau water authorities, saying, "Water is a necessity that every New Yorker should have easy, affordable access to." But customers have increasingly complained of rising water bills from Liberty after the PSC granted the utility a three-year rate hike in 2024, increasing bills by as much as $19 a month starting last year.

"It’s crazy," said David Beldner, of East Rockaway, a Liberty water district customer who has written scores of letters to the utility, state officials and top officials at the PSC, all to no avail. "I think the thing is one big fraud and I don’t think the DPS and PSC did their job. It’s terrible."

WANS in November sent a letter to Liberty offering to pay $17.2 million for the company’s North Shore assets, which include around 4,500 customers and infrastructure in and around Sea Cliff. The authority has said it can offer water more cheaply than Liberty.

Liberty, in a statement emailed from spokeswoman Pamela Bellings, said it had "committed to, and are actively having, good-faith negotiations around municipalization and will continue to do so. Because this is an ongoing negotiation, we are unable to provide any further information." 

Despite charges of Liberty’s "lack of good faith" in responding to the offer, the North Shore authority said it is "ready to proceed with in-person negotiations" with the company, as outlined in a step-by-step timeline in the PSC agreement.

Public hearings are required before the authority can enter into any contract or initiate condemnation proceedings to take the assets through eminent domain. The authority has requested information from Liberty concerning the potential presence of lead or asbestos in distribution pipes, and the existence of "claims against manufacturers and others for contamination of the groundwater currently retained by Liberty."

Officials at the Water Authority of the North Shore declined to discuss the letter with Newsday or provide a copy. The letter was posted on the PSC website.

The authority also noted that it provided Liberty with an appraisal of the system in March, but that Liberty hasn’t responded to it. Liberty is expected to provide an appraisal in response to the authority’s, but it’s not expected until September.

Thus far, none of three separate initiatives that had proposed public water for Liberty service areas has come to fruition. The Massapequa Water District, which in 2020 launched an effort to take on some 5,800 former New York American Water customers in East Massapequa, is "still involved in trying to negotiate with Liberty," but talks have not led to a definitive agreement.

Mike Mazzola, who heads up the district, said he was unable to provide further details. In a letter Mazzola and other district officials wrote to the PSC in April 2024, they noted that the parties were "undergoing negotiations" but requested that the PSC "serve as mediator to successfully conclude our negotiations." It’s unclear what came of the request.

As Newsday has reported, the South Shore Water Authority, created under state enabling legislation to take on about 113,000 Liberty customers and assets in Hempstead, also has made an offer for that service area. But progress has been slow, said former Nassau County legislator Dave Denenberg, a Merrick customer and member of the activist group Long Island Clean Air, Water and Soil. In an email he called the public takeover process "a joke."

Denenberg’s group has complained to the PSC about Liberty’s "failure to adhere to the timeline set in the order allowing Liberty’s acquisition," but he received no response, he said. The South Nassau Water Authority subsequently held a meeting July 7 — its first in 10 months, Denenberg said — after stating it had sent its takeover proposal to Liberty last fall. "Apparently, Liberty feels no pressure and is taking its time," Denenberg said.

John Reinhardt, a board member of the South Nassau Water Authority, in a statement said the agency is ”currently negotiating commercial terms with Liberty Utilities” and “continues to negotiate in good faith with the support and expertise of our utility acquisition consultants."

Beldner agreed that a public takeover of Liberty in Hempstead "would be the best solution possible," but he's also resigned himself to the fact that it's "not going to happen. Liberty is not going to go for that — they’re making too much money."

Bellings said Liberty is "dedicated to keeping the promises made to improve the customer experience." She noted summer is the peak season for water use and that Liberty "regularly educates customers on water conservation, especially irrigation best practices, which lowers water usage and bills." Customers with questions can call 877-426-6999.

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

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