Aqua Water Rate Hike Approved

A week after the Town of Hempstead announced it would open an investigation into a takeover of Aqua New York, the New York State Public Service Commission adopted a three-year rate plan this morning for the private water company.  

The Commission voted 5-0 for the new plan that will result in increases in the average Aqua customer's annual water bill by 9.14 percent in the first year (starting on Feb. 6, 2010), 1.57 percent in the second year, and 1.95 percent in the third year. The average bill will be $643 in the first year, according to the PSC. 

Under the adopted plan, fire hydrant usage fees will also increase 10.7 percent this year, 1.57 percent next year and 1.95 percent in 2012.

"Ensuring the company's rates reflect no more than the reasonable costs of providing water service are among the most critically important aspects of our review," said Commission Chairman Garry Brown. "While we are always reluctant to adopt a rate increase, especially during times of economic difficulties, ignoring the fact that rates must go up to adequately meet service costs is not a reasonable option because that will ultimately reduce service quality and reliability."

Merrick and Bellmore residents, who are served under Aqua, came out in force at hearings last year against the rate increases, but the PSC contends that it had no other choice but to adopt the proposal.

"The commissioners hands were tied," PSC spokesman James Denn said.

As to why Aqua needs more money from its customers, Denn said, "The largest reason has nothing to do with the upfront costs of running the company, but it's to pay for property tax increases."

Legislator Dave Denenberg has petitioned the Town of Hempstead over the past three years to reactivate the Water Authority of Southeastern Nassau County (SENWA). SENWA was created by the state in 1991 to explore the area's water supply options, but its board was abandoned in 1997.

"Now more than ever we need public water as opposed to private water," Denenberg said. "Aqua was already soaking us with their water rates and now the PSC has condoned them and they are literally drenching us with these water rates."

Hempstead Town Supervisor Kate Murray said the recent rate increase adds "insult to injury for already overburdened water customers."

"I am outraged," she said. "I recently called for the reactivation of the long dormant Water Authority of Southeastern Nassau County in the wake of Aqua's rate increase request before the PSC. These new increases clearly underscore the need for the independent Southeastern Nassau Water Authority to take a fresh look at whether a public takeover of Aqua would result in lower water rates for customers."

Local fire departments also expressed their displeasure with the rate increase, which will raise annual fire hydrant fees from about $550 each to $640 in Merrick, according to a Merrick fire chief. 

"They are out of their minds," the chief said of Aqua.  "East Meadow is paying something like $34 a hydrant.  There isn't too much that we do with them [hydrants]. If there's not a fire, we don't use them."

In direct response to consumer concerns about water quality and service, the commission said Aqua New York would become the first water utility in the state to be subject to a customer service incentive mechanism under which up to $96,000 of its annual revenues, would be at risk should its "escalated" customer complaint numbers, as that term is defined, exceed the proposed targets.

Four public statement hearings were held prior to the Commission's vote and nearly 3,000 public comments were filed in the proceeding. A number of comments suggested the Commission should require or mandate Aqua New York become municipally owned; an action the Commission said was beyond its purview or authority.

Aqua New York provides water service to almost 45,000 customers in southeast Nassau County, in portions of the towns of Hempstead and Oyster Bay. Its 21 square-mile service territory includes all of the communities of Merrick, Bellmore, Wantagh, Seaford and East Massapequa and portions of North Merrick, North Bellmore, Levittown and Massapequa Park.

The Commission's decision today may be obtained by going to the Commission Documents section of the Commission's Web site and entering Case Number 09-W-0237 in the input box labeled "Search for Case/Matter Number." Many libraries offer free Internet access. Commission orders may also be obtained from the Commission's Files Office, 14th floor, Three Empire State Plaza, Albany, NY 12223 (518-474-2500).