Liberty Utilities finalizes purchase of NYAW

If there’s a glitch, it would not be the first time these private water players pulled shenanigans to prevent municipalization.”

Agatha Nadel, founder and director, North Shore Concerned Citizens

With Liberty Utilities finalizing the $608 million purchase of New York American Water on Jan. 3, North Shore residents are expressing hope for better service and lower rates.

Liberty, a subsidiary of Canadian company Algonquin Power & Utilities, is a regulated water, wastewater, natural gas, electric and propane utility company, providing local utility management, service and support to small and mid-sized communities across North America.

The Public Service Commission approved the sale of NYAW to Liberty on Dec. 16, outlining a specific timeline and path to public water for North Shore municipalities, while providing $23.5 million in direct customer benefits, including an immediate base rate reduction. The funding from Liberty would, ideally, limit the impact of past rate hikes that NYAW agreed to delay because of several factors, including the coronavirus pandemic.

“Customers of New York American Water have long been burdened by high rates for the water they use on a daily basis, driven largely by costs that have nothing to do with the provision of water,” Rory Christian, chair of the State Public Service Commission, said. The “agreement includes a rate freeze that will be of immediate assistance to customers, establishes other much-needed consumer protections and creates a pathway for future municipalization.”

The sale to Liberty came after many residents complained over the years about what they deemed unfair rate hikes and a lack of quality service from NYAW. With the takeover, Liberty agreed to freeze rates through 2023 as part of a settlement with the PSC, which approved the deal last month. Liberty will also keep current NYAW employees and managers for at least two years.

Liberty’s acquisition of NYAW’s operations comes amid the North Shore’s transition to public water — the culmination of a fight by residents and local activists dating back to 2016.

“Local civics in Glen Head have been trying to get NYAW out of the North Shore for six years. We’re elated it came to fruition this year,” said George Pombar, president of the Glen Head-Glenwood Civic Association. “When you live in this community, the rates today are outrageous. Priority number one for us has always been to lower the rates. Sometimes Jericho’s rates can be $15, but ours come to $240 the same month.”   

Pombar also noted he and his fellow civic group members were originally confused by the purchase of NYAW properties by Liberty, as the assets purchased have been authorized by the state to be allocated toward the new, soon-to-be-established public authority.   

“In a perfect world, this sale should have not been allowed to go through; however, I understand the reasons behind it,” said Agatha Nadel, founder and director of North Shore Concerned Citizens, an advocacy group started in 2017 to fight NYAW and advocate for municipalization of the North Shore’s water system.

The PSC approval of the sale also included a stipulation that Liberty negotiate in good faith with localities, including the Village of Sea Cliff, in their efforts to take public portions of the Nassau Water System, which serves more than 4,500 customers on the North Shore.

Lloyd Nadel, Agatha’s husband and counsel for the Glen Head-Glenwood Landing Civic Association, said she is hopeful the stipulations included in the sale will allow the transition to public water to go as planned, and ratepayers will come out on the other side with affordable public water.

“When the NYAW case was settled with the PSC, the goal for NSCC and the Glen Head-Glenwood Civic Counsel was to obtain public water,” Lloyd said. “Part of the settlement was an agreement that Liberty would negotiate in good faith with the board members of the newly formed North Shore Water Authority.” 

Board members are to be appointed by political leaders of the Town of Oyster Bay, City of Glen Cove and Villages of Sea Cliff, Old Brookville and Roslyn Harbor by Feb. 1. That board will be responsible for bringing about the purchase of the now Liberty assets and hire the necessary people to provide water at discussed, reasonable rates, with increased local customer service.

“The problem is, knowing the history of how these water companies work, we want to make sure it’s going to be enforced, it’s going to be followed through,” Agatha Nadel said. “It’s now in the hands of the politicians to appoint members to the North Shore Water Authority Board that is going to carry the ball over the finish line and get this done.”

In a release sent to NYAW ratepayers, Liberty stated the sale would not affect that path to public water, and the settlement set the conditions that Liberty agreed to enable that transition to happen.

“Combined with the recent bills passed by the state and signed by the governor to form the North Shore Water Authority, we now have a straightforward path to form our own public water district or possibly merge with another public district,” the release said. “Liberty will be our private water company for now, continuing under the NYAW name, but we will be moving ahead with plans to have public water within a year.”

The approval sets forth a specified timeline for municipalization negotiations to begin in which the companies and the interested municipalities will exchange information, enter into good-faith negotiations, conduct expert evaluations and appraisals, and execute a purchase agreement. The joint proposal also preserves a municipality’s right to pursue eminent domain proceedings if they decide to do so.

“It is critically important that this outline be enforced and followed through to affordable public water,” Agatha Nadel said. “If there’s a glitch, it would not be the first time these private water players pulled shenanigans to prevent municipalization.”

Bruce Kennedy, Sea Cliff Village administrator and president of North Shore Concerned Citizens, said he expects mayors and the Oyster Bay Town supervisor to nominate directors for a new North Shore Water Authority board in coming weeks. After that, he said, the authority will notify the new [Liberty] entity of the village’s intent to take over the North Shore operation.

“We’re looking to put together a rather robust team that can move this forward,” Kennedy said. He has been in contact with existing public water utilities, including those in Jericho, Roslyn and Massapequa, to determine whether the North Shore authority will contract out management of the system or take on the work itself.”

While Agatha Nadel said she is optimistic the fight for public water in Sea Cliff will end sooner rather than later, she is hesitant to celebrate a victory until she sees municipalization for herself.

“We consider this a big win for the community, earned through a lot of hard work, which will lead to lower bills, better service and more community control,” she said. “American Water will finally be gone and public water is on its way.”

Mike Smollins contributed to this story,