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Company: Bill complaints tied to new 'conservation rate,' summer usage 

New York American Water's Merrick headquarters.

New York American Water's Merrick headquarters. Credit: Danielle Silverman

New York American Water on Monday said a preliminary review of high-bill complaints from South Shore customers shows that increased summer usage coupled with a recently instituted "conservation rate" were primarily at fault.

The company has received 632 complaints from customers in recent weeks as water use has increased during the summer months, said Bill Varley, deputy chief operating officer for parent American Water. Of those, he said, only around 10 are believed to be billing anomalies, including potential leaks that pushed bills higher. And he discounted the notion that new meters were the cause, as some customers have suspected, noting that only five of the 632 customers who complained had a new meter installed in the past year.

Instead, the company said the 2017-approved conservation rate, intended to drive down usage on the system during the peak summer months, appeared to be the primary cause for the increases. The new conservation rate, which went into effect in April, increases the per-gallon charge as customers use more. “As people use a little more water, they are starting to see the impact,” Varley said.

In American Water’s analysis, a customer who used 4,000 gallons a month would see a slight increase due to the new charge, from $42.73 in 2017 to $44.57 this year. But at higher volumes, the cost increases more. Customers who use 20,000 gallons and had a $145.42 bill in June 2017 would see a $178.54 monthly bill this summer, or $33.12 more, the company said.

But critics weren’t buying that explanation. “We’re seeing a much more precipitous jump,” said Sen. Todd Kaminsky (D-Long Beach), whose office has logged more than 400 complaints in recent weeks. In some cases, constituents have seen a more than 100 percent increase, Kaminsky said.

Newsday has reported one customer saw a jump to $281 from $81, and another saw a spike to more than $1,900 from $48. The company has already corrected the latter billing error. 

Even assuming part of the problem was the conservation rate, Kaminsky said, the company hasn't properly told people of the charge. “Did people have the right notification the change was occurring?” he said of the conservation rate. “This is a major change.”

Varley said while the new rate was discussed in news releases, bill inserts and news articles before it was implemented, the company plans additional communication in coming weeks and months. It will also make a new internet portal available so customers can monitor their usage compared to previous years, to reduce bills when usage starts to spike. “It’s about conservation and protecting the aquifer,” Varley said.

But Claudia Borecky, co-director of watchdog group Long Island Clean Air, Water and Soil, said the new rate is part of a bigger problem that allows the company to charge for costs that public water companies don’t. “There’s so many different ways they make money,” she said. “It’s gotten to the point where it’s ridiculous.”

Varley said the company is investigating each individual complaint of high water bills, and is calling each customer with a field force of 25 additional service people. He said the company plans to resolve all complaints by the end of August.

Varley noted that daily water use in the region more than doubles in summer months, from 18 million gallons a day to 47 million gallons a day this week. That means increased resources and costs.

“To meet this peak demand, New York American Water has to mobilize increased labor; invest in additional infrastructure such as peaking wells, booster pumps, larger diameter pipe, as well as pay higher costs associated with energy and chemicals for water treatment,” the company’s statement said, explaining the higher cost. “This all requires additional resources.”

The high-bill complaints on the South Shore are separate from soaring bill problems in the Sea Cliff district, which led to a Public Service Commission investigation that found company employees sought to deceive regulators during 2016 rate-hike proceedings. The findings have prompted calls for a criminal investigation, and for taking the water system public.

The Nassau district attorney’s office is reviewing customer complaints, the state comptroller’s office is reviewing some issues related to New York American Water in an audit of PSC matters, and the PSC continues to investigate both the South Shore and North Shore matters.

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