With a rate hike of as much as 26 percent facing New York American Water customers on May 1, elected officials have sought to save Long Island ratepayers tens of millions of dollars on their bills while creating a path for a public takeover of the water system.
The Senate introduced legislation that would eliminate NYAW’s special franchise tax, which constitutes between 31 and 50 percent of customers’ monthly bills. The measure is projected to exempt the the utility from the $29.5 million special franchise tax, saving money for ratepayers on Long Island. Additionally, it would create the Nassau County Water Authority, a new public benefit corportation that would be authorized to take over public and private assets, as well as the functions currently provided by NYAW and begin the municipalization process.
Senators Todd Kaminsky, a Democrat fron Long Beach, James Gaughran, a Democrat from North Port, John Brooks, a Democrat from Seaford, and Kevin Thomas, a Democrat from Levittown, supported and passed the bill.
“American Water customers pay some of the highest water rates in the state — and that needs to change,” Kaminsky said, according to a news release. “By setting a path to rate relief and municipalization, we can save real dollars for Long Islanders, and that is precisely what this bill does.”
NYAW has agreed to sell the company to the Canada-based Liberty Utilities for $607 million, pending approval by the Public Service Commission. The utility has been the subject of several state investigations after rate increase irregularities and has also faced criticism over rates from community members and elected officials. NYAW has opposed a public takeover due to the length and cost of the endeavor.
A study ordered in February by Gov. Andrew Cuomo and conducted by the state’s Department of Public Service found that municipalization of NYAW’s Long Island infrastructure is possible.
Now that it has passed the Senate, the bill will next be presented on the floor of the Assembly.