State Senate Passes Bill To Municipalize New York American Water

MERRICK, NY — On Tuesday, the New York State Senate passed a bill that would create the Nassau County Water Authority and start the process of municipalizing New York American Water.

Last month, the state Department of Public Service released a study showing that New York American Water customers could have significant savings if the state municipalized the utility company. As part of the plan, the DPS recommended creating the Nassau County Water Authority to be the public entity that oversees the new public utility.

The recently passed bill, which was sponsored by Long Island's Sen. James Gaughran, would eliminate New York American Water’s special franchise taxes, which makes up between 31 and 50 percent of a customer’s monthly bill.

If the bill becomes law, it would exempt the utility from $29.5 million in special franchise taxes, creating immediate savings for ratepayers. Gov. Andrew Cuomo already announced his support of municipalizing the utility.

The bill also outlines the creation of the Nassau County Water Authority, which would take over the public and private assets of New York American Water and begin the process of municipalizing the water utility.

“In a modern society, there is no reason why a private company should be profiting off the backs of Nassau residents for access to the most basic human necessity — water," Gaughran said in a statement. "Public water option is the only viable path forward, and I am proud to have worked in partnership with the community to get rid of for-profit water companies once and for all. My legislation will remedy a deep inequity in Nassau County that has forced customers of NYAW to bear an unfair burden and pay exorbitant rates for the same water.”

Gaughran was joined by fellow Long Island senators John Brooks, Todd Kaminsky and Kevin Thomas in passing the legislation.

New York American Water customers are also facing an impending 26 percent rate hike on May 1. As a private utility, NYAW has to pay taxes that public utilities don't. After it completed much-needed infrastructure improvements in 2017, the assessed values of the utility's assets increased. The rate increase was supposed to go into effect last year, but it was delayed. That hike could be stopped by the Public Service Commission, Gaughran said.

Liberty Utilities is currently in the process of buying NYAW, but that sale is on hold and is being reviewed by the Department of Public Service. Liberty filed a letter with the department earlier this month against municipalization.