Gov. Kathy Hochul has signed legislation that opens a pathway for the public takeover of New York American Water, signaling that rate relief for the private water company’s many ratepayers in Bellmore, Merrick and other Town of Hempstead communities may be on the way.
Hochul signed the bill on Nov. 3, the day after the election, citing NYAW’s high rates as the reason to move the legislation forward. The legislation clears the way for the public acquisition of NYAW’s operations, to be replaced by a South Shore Water Authority, whose members will be named by the Nassau County Legislature and the Hempstead Town Board. A North Shore Water Authority would replace NYAW’s operations in the Town of Oyster Bay.
“Water is a necessity that every New Yorker should have easy, affordable access to,” Hochul said in a statement. “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.”
In June, the bill passed unanimously in the State Legislature by counts of 63-0 in the Senate and 149-0 in the Assembly.
“Water is perhaps the most essential resource for life, and as such should never be a commodity for corporate profit,” Sen. John Brooks, a major co-sponsor of the bill, said in a statement. “For years, we have been trying to implement a practical solution to the exorbitant rates that American Water customers have been forced to pay for basic water services. Today we have made significant progress towards that becoming a reality. I am proud to have sponsored this bill, and I thank Governor Hochul for her support on this key issue for our constituents.”
The legislation came together in the Legislature as the proposed $608 million sale of NYAW’s operations to Liberty Utilities, another private entity, was coming to a close. Then Gov. Andrew Cuomo ordered the state Department of Public Service to look into the feasibility of a public acquisition, halting the sale.
On Nov. 3, a joint settlement proposal was filed for Liberty to complete the purchase under new terms. It pledges to give “fair and reasonable consideration” to issues brought up by advocates and state officials, and offers avenues for potential rate relief for customers if the sale goes through. It also provides a timeline for the sale.
Much needs to be done before the state approves the sale, including the holding of hearings.
If the public takeover proceeds, NYAW’s assets will have to be valued, according to Brooks, an amount that may be up for debate. Many of the company’s infrastructure improvements were funded by ratepayers, making them the owners, he said.
Funding may also be allotted in the state budget by Hochul.
Brooks has also been looking into the possibility of an existing municipal entity, such as the Suffolk County Water Authority, taking over NYAW’s operations. While the authority might need additional staffing, it has the expertise and equipment to facilitate an efficient, and possibly faster, takeover.
On the North Shore, the Massapequa Water District has already devised a plan to take over NYAW’s East Massapequa Service area.
Brooks said that despite the extensive work that still needs to be done, one thing is certain: High water rates have been in effect long enough. “We have lived for too long a time with excessive rates,” he said. “I do not believe that we should ever tax water, which is a natural resource required for life.”
Dave Denenberg, co-director of the Merrick-based Long Island Clean Air, Water and Soil, said was pleased to see the legislation become law, but was weary of being stuck in a situation he describes as “déjà vu.” In 2013, after the Town of Hempstead conducted a feasibility study of a public takeover of NYAW, Denenberg pushed for municipalization, but to no avail. The effort ultimately failed, with officials saying it would cost the town and taxpayers as much as $80 million.
“Everyone is going to have to hold the Town of Hempstead and the Nassau County Legislature’s feet to the fire,” Denenberg said. He added that those who would serve on the South Shore Water Authority’s board should be people with backgrounds in finance, civic engagement, environmental work and, of course, water.
“Everyone should hold them responsible for appointing people who are open, honest and non-political,” Denenberg said.