Canadian Company Buys New York American Water

A deal announced yesterday paves the way for New York American Water, which supplies water to more than three dozen Long Island towns, to be purchased by a multi-billion-dollar Canadian utilities company.

Liberty Utilities Co. announced that its subsidiary, Algonquin Power & Utilities Corp., would purchase the Merrick-based New York American Water for $608 million. The utility services nearly 40 towns in Nassau County, with some more service supplied upstate. The private utility has 125,000 customers.

"This was a very difficult decision for American Water, as we have had the privilege of serving customers and communities in New York for more than 130 years," said Susan Story, president and CEO of American Water, in a statement. "After careful and comprehensive analysis, we believe it is in the best interest of our customers in New York to sell to Liberty Utilities, which already has utility operations in the state of New York and will have a larger presence once the transaction closes. We are committed to working together to ensure that the transition is unnoticeable to our customers and that safe and reliable water service continues throughout the transition and beyond."

Over the last year, New York American Water has come under fire from customers and the government alike. Rate hikes have been incredibly unpopular, and in some cases, very steep. The rate hikes prompted federal and state investigations, and legal action from the New York State Public Service Commission.

Algonquin said that the acquisition may lead to lower rates for local customers.

"We have experience in multiple states as a water utility operator and are known for our commitment to excellence," said Ian Robertson, CEO of the Ontario-based company. "We are committed to partnering with our regulator and other state officials to support the affordability of water services, including reducing the burden of local taxes on New York American Water's customers, which can account for more than half of their monthly bills."

The sale is pending approval from the state Public Service Commission, as well as other regulatory approval processes.