Schumer to call for federal probe of NY American Water, citing federal funds

Sen. Chuck Schumer on Monday is expected to call for a federal probe of New York American Water that takes aim at infrastructure funding his office said the embattled company could receive.

Schumer will say that any plan by the company — accused of rate-hike irregularities — to use such funds "demands enhanced scrutiny given the company’s rate hike madness," according to an advisory.

A Schumer aide said the funding could amount to upward of millions of dollars, though an exact figure was unavailable on Sunday.

The senator is the latest public official to call for or launch an investigation of the company after the New York State Department of Public Service announced in a report in June that company employees sought to intentionally deceive regulators during rate hearings in 2016.

Soaring water bills in the aftermath of state Public Service Commission approval of those rates have led to angry public meetings, calls for public water to take over the company’s districts in Nassau, and investigations or complaint reviews by the PSC, the state attorney general, the state comptroller, the Nassau district attorney’s office, and the Nassau comptroller.

It’s unclear which federal agency would take on a broader U.S. probe of the company, but it could fall to an agency such as the Government Accountability Office, which has oversight of such funds.

Schumer’s call follows an agreement by Gov. Andrew M. Cuomo and the PSC with the company that would rescind a contested “conservation rate” that the company has cited for the high-bill complaints; at least $1 million for rate relief in the Sea Cliff district; the appointment of an independent monitor to oversee the past rate irregularities and future compliance, and other measures the state values at $11 million.

In a statement Sunday night, American Water Deputy Chief Operating Officer Bill Varley didn’t specifically address Schumer’s call for a probe or the prospect of federal funds. 

But he noted the settlement with New York State, which he said provides millions of dollars in rate relief and which the company “worked day and night to reach.” 

“New York American Water will also work with the PSC and an appointed independent monitor as an added step to review controls and processes in an effort to help earn customer confidence,” he said.

Schumer is expected to appear Monday at the home of a Glen Head family that is dealing with high bills and say a federal investigation “could help local and state officials piece together how exactly things went so wrong with rate hikes, billing and other consumers' concerns.”

At a public meeting in East Rockaway earlier this month, New York American Water customers were more aggressive than ever in calling for the company’s Nassau-based water districts to be taken over by public water entities. Cuomo on Saturday called that “a real option" if a public water company was willing to take on the districts. 

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

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