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More New York American Water rate hikes on tap for 2020

With New York American Water's recently implemented revenue

With New York American Water's recently implemented revenue adjustment increase Nov. 1, and three prior years of increases, a spring hike promises to make Long Island's most costly utility-based water even more expensive. Credit: Danielle Silverman

Rate hikes for New York American Water customers will continue in 2020, when the company is scheduled to implement an increase of more than 10% for Lynbrook-area customers as part of a state-approved four-year rate plan, an official confirmed Wednesday.

The increases in April will be 5.7% for Merrick-area customers and 4.5% for those in and around Sea Cliff.

Coming atop a recently implemented revenue adjustment increase Nov. 1, and three prior years of increases, the spring hike promises to make Long Island’s most costly utility-based water even more expensive.

For Lynbrook area customers using 8,000 gallons, the 2020 increase of 10.4% will hike bills an average $6.90 a month, the company said. In Merrick, the increase will amount to a $2.88 hike, and $3.43 for Sea Cliff. Customers who use more than 8,000 gallons will pay proportionately more. 

Lee Mueller, a spokeswoman for the company, said the previously approved increase in April “reflects much-needed investment in our infrastructure, such as water main replacement and iron filtration plants, to deliver high-quality water to our customers.”

Separately, customers in the Sea Cliff district continue to dispute costs of a new water tank for the region. Residents have filed complaints with the state Public Service Commission disputing the cost of the tank, charging that it's nearly double the cost they were originally told: $6.2 million compared with an original estimate of $3.525 million. 

“It’s just never ending,” said George Pombar, president of the Glen Head-Glenwood Civic Council and a member of North Shore Concerned Citizens, who has taken complaints about the charge to the state Public Service Commission. North Shore Concerned Citizens is among ratepayer groups and politicians seeking to take the privately owned water district public. 

Mueller referred to a June statement in which she said, "While the cost to construct [the tank] is higher than initial estimates, the cost is based on competitive bids from the industry." She said the company will pay for the tank project through the previously approved four-year rate hike, not a new bill charge as Pombar said he expected early in 2020.

New York American Water, with Long Island operations exclusively in Nassau, from Merrick and Lynbrook to Sea Cliff, has the Island’s most expensive water, according to a study released earlier this year. It has 125,000 Long Island customers.

Mueller said the company has been working with customers to conserve water and lower their bills, including through a so-called H2O Control conservation program to “equip our customers with tools and technology to reduce their water use and save money on their bill.”

But water-company gadfly David Denenberg, director of LI Clean Air, Water and Soil, charged that customers are paying the cost of conservation through a recently implemented surcharge of up to 6.87% for Lynbrook-area customers (lower for Merrick and Sea Cliff area customers) to recoup expenses due to lost revenues and tax increases for the year ended March 31, 2019.

Mueller said the revenue adjustment clause was designed to "prevent customers from overpaying while also protecting the utility from underearning what is needed to continue to invest in its systems."

She added: "When our customers conserve, not only do they reduce their water bill, but New York American Water is able to defer infrastructure investment projects that are needed to meet peak water demand ..." She said the state PSC allows the company to earn "up to 9.1 percent return on needed investments to infrastructure. The rate order does not guarantee any profit."

Denenberg and his group were among the first to point out irregularities in New York American Water rate-hike calculations that led to a spate of state and federal investigations. Most were settled last year. 

Mueller said it was too early to determine whether the company will file a new rate case for hikes beyond 2021. She noted the last of the four years of rate hikes is scheduled to end on March 31, 2021, and added the company "would follow standard rate proceedings regarding rates after this date. We do not yet know the date of our next rate adjustment filing."

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