Feds To investigate New York American Water Rates: Schumer

Following huge, unexpected rate hikes earlier this year, New York American Water, and its parent company American Water, are going to be investigated by the federal Government Accountability Office (GAO), said Sen. Charles Schumer.

New York American Water came under fire in July after customers were hit with huge, and unannounced, rate hikes in their water bills following the installation of new water meters. Some customers said their water bills doubled. This led to multiple complaints to the state's Public Service Commission.

The outcry was followed by action from New York State. On Aug. 18, the company reached a legal agreement with the state that provided $11 million in lowered bills and other benefits for the 120,000 customers the company has on Long Island. The legal action cemented that agreement and provided accelerated relief to customers, as well as made the terms of the agreement enforceable in court.

According to Schumer, the GAO will specifically look into the use of federal funds within the Environmental Protection Agency, and more specifically the Drinking Water State Revolving Fund (DWSRF). Schumer said he made a case to the GAO by showcasing American Water’s effort to seek federal dollars. Past use and current eligibility demanded enhanced scrutiny by an independent federal agency, Schumer said. New York American Water is currently listed on New York’s ‘Intended Use Plan’ for DWSRF funds and may apply for up $20 million in debt to cover costs of water main replacements, upgraded distribution systems, and a new water treatment facility

“I am glad the GAO has heeded the call because there was precedent for this request and substantial reasons to warrant a formal investigation," said Schumer. "First, when New York American Water acquired Aqua America, Inc, the New York State Drinking Water State Revolving Fund – which is sustained with federal money – supported nearly $68 million of the company’s long term debt. Second, New York American Water has been listed to potentially receive more funds from the New York State Environmental Facilities Corporation (EFC), via the same DWSRF fund, and those dollars flow directly from the feds.”

New York American Water services multiple Long Island communities, mainly on Nassau's South Shore, but also a few North Shore communities.

“New York American Water’s tactics to deploy a rate hike, make a mess of billing and capitalize on a newfound ‘conservation fee’ were aggressive money-raising tactics while the company simultaneously was accessing federal funds and that raises serious concerns the federal government will now look further at on behalf of consumers and Long Islanders,” Schumer said.

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