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Customers weigh in on prospect of NY American Water becoming municipal utility

A sign posted at an New York American

A sign posted at an New York American Water pump house in Rockville Centre on Oct. 30, 2020. Credit: Newsday/Steve Pfost

Frustrated Nassau customers aired years of gripes over New York American Water rates and quality during public hearings this week as the state finalizes a study on prospects of a public takeover.

"There’s a great opportunity for us to essentially control our own destiny, and that’s why we need your assistance," ratepayer Clive Stewart told regulators in the last of three virtual public hearings Thursday night, echoing calls of dozens of ratepayers.

Customers from Baldwin to Sea Cliff aired concerns about "brown" water and the "exorbitant" price they pay for it at the virtual hearings, which will inform the state study due by April 1.

The hearings and the study come as Merrick-based New York American Water seeks to sell itself to Liberty Utilities of Canada for $607 million, a sale that requires Public Service Commission approval. The company has been the subject of years of withering criticism and investigations over high bills and rate-case irregularities.

"The Liberty proceeding has triggered strong local interest in reviewing options for a potential public takeover of all or part of the system," said Rory Lancman, special counsel for ratepayer protection for the state Department of Public Service during Thursday's session. Two PSC commissioners, Diane Burman and Tracey Edwards, listened in.

Lancman noted the state’s report won’t specifically recommend any one village or town take over the water company. Rather, the state will analyze financial and legal information so "each locality can make a determination for itself whether or not it desires to take over that particular part of the company." A new public entity could be created to run parts of the system, if feasible, he said.

Ratepayers pleaded for the state's help.

"It just seems so unfair that something that is a necessity of life should have to cost 100 times more … for someone who lives in one area when a neighboring area pays so much less because it’s municipal" water, said Paula Blum of Wantagh. "Municipalities should be responsible the things that are necessary for us to live and water is the main one."

Jack McCloy of Baldwin noted the "tremendous disparity" between his recent water bill of $106.58 from American Water and the bill his mother received from a public water entity in Melville for the same amount of water at $8.03. "I can’t see how there’s a legitimate excuse for the usurious difference in pricing," he said, in urging Gov. Andrew M. Cuomo to reject the sale to Liberty.

New York American Water has blamed its higher rates on a special franchise tax "unjustly" placed the utility that it must pass on to its customers, saying a sale to Liberty is the "best path forward," while a public takeover would lead to an increase in the debt service obligations."

"The benefits of public water far outweigh any benefits the private sector can muster," Agatha Nadel of Glen Head said during a Tuesday session.

Susan Melnick of Merrick, voiced anger over the high cost for water that "often is brown. Not beige or discolored but brown. Sometimes it has an odor, it’s very expensive, and I have been forced to buy water in the supermarket."

State Sen. Todd Kaminsky (D-Long Beach) said, "Anything we do has to result in the significant rollback of rates for my ratepayers who are disgusted and overwhelmed."

Sen. John Brooks (D-Seaford), said he "strongly favors" a public takeover.

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