Gov. Hochul signs bills to create Nassau water authorities
The sign in front of the New York American Water building in Merrick in April. Credit: Newsday/Steve Pfost
Gov. Kathy Hochul on Wednesday signed bills that create two new Nassau public water authorities, as the state Department of Public Serivce released a joint settlement proposal that includes new terms for Liberty Utilities' $607 million purchase of New York American Water.
In a statement to Newsday Wednesday afternoon, Hochul said she signed the bills creating North and South Shore water authorities in Nassau because, "Water is a necessity that every New Yorker should have easy, affordable access to."
"The historically high rates charged by New York American Water could be reduced through a public takeover of the system, and these new public water authorities give the local governments the legal vehicle they need to pursue the public option," she said.
The signing of the bills, widely applauded by ratepayer groups and local officials, came as the state DPS reached a proposed settlement agreement with Liberty and local groups interested in taking over parts of the system. The settlement would provide rate relief of up to 10% for customers through a $23.5 million "public benefit adjustment" to be paid by Liberty. It also would include provisions for the public water entities to purchase parts of the system, and a commitment by Liberty not to file for a rate hike until 2023, delaying any possible increase to 2024.
The proposal also would require Liberty to "engage meaningfully" with the new public authorities and the Massapequa Water District for the possible public takeover of parts of embattled New York American Water's Nassau service territory. The entities would have up to 465 days from Liberty's purchase to complete their proposed buyouts.
The proposed settlement and Hochul's approvals follow nearly a year of fruitless efforts by the state under former Gov. Andrew M. Cuomo to take NYAW’s Nassau service areas public while instituting rate relief through the elimination of a special franchise tax. The State Legislature passed the two water authority bills earlier this year, providing for $1 million in funding for the new authorities and pathways for public water. They would be run by locally appointed boards.
State Sen. Jim Gaughran (D-Northport) said Hochul's signing of the North Shore bill he authored "creates the framework for the community to move to public water." Gaughran said he was "grateful to the governor for giving the people of this part of the North Shore of Long Island self-determination."
Parties to the proposed settlement talks include the Massapequa Water District, which has already offered a plan for taking over NYAW’s East Massapequa Service area, and the Village of Sea Cliff and North Shore Concerned Citizens, which have been eyeing the company’s North Shore service territory.
Liberty and American Water officials, in a letter to regulators in March, first broached the idea that they would be "amenable" to a possible sale of the East Massapequa and Sea Cliff districts of New York American Water’s service area if the PSC approved the sale, with certain conditions.
In their letter, they said talks for the proposed spinoffs "would occur only after PSC approval of the acquisition, closing of the acquisition by Liberty and American Water," and removal of a tax that accounts for up to half of customer bills. The tax provision is not part of the latest offer.
The prospect of state approval for the sale is on a timeline itself. The Liberty-NYAW deal had a sunset provision of early January. And much needs to happen before final PSC approval, including the filing of opposition papers and evidentiary hearings on the transaction.
Claudia Borecky, co-director of Long Island Clean Air, Water, Soil, said the ratepayer activist group will oppose any transaction for the sale to Liberty, chiefly on grounds that any deal can only result in additional expenses that will be passed on to customers. LICAWS co-director David Denenberg added, "It's now up to the town and the county legislature to do the right thing and appoint independent, nonpartisan, nonpolitical commissioners" to the new authorities.
Lynda DiMenna, president of New York American Water, in a statement said, "New York American Water continues to focus on advancing the transaction between our company and Liberty Utilities, as it is in the best interest of our customers."
A Liberty representative didn't return messages seeking comment.
Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.
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