State Takes Legal Action Against New York American Water

The New York State Public Service Commissioned announced on Wednesday that it was taking legal action against New York American Water to provide relief for South Shore customers who were suddenly slammed by hugely increased water rates.

The action comes with an agreement the company reached with Gov. Andrew Cuomo on Aug. 18 that provided $11 million in lowered bills and other benefits for the 120,000 customers the company has on Long Island. The legal action will cement that agreement and provide accelerated relief to customers, as well as make the terms of the agreement enforceable in court.

The agreement will suspend the highest conservation rate for New York American Water customers on Long Island through next March, which is expected to cost the company $2.5 million. In addition, NYAM will reduce rates for all customers by $6.4 million and give them credit back.

“At Governor Cuomo's direction, we acted quickly to investigate the high bill complaints in the company's Long Island service territory,” said Commission Chair John B. Rhodes. "While our investigation continues, the court filing will provide for the customer refunds that have been promised. In addition, it will ensure that the company moves forward to address its past shortcomings, which includes failing to adequately inform their customers of the changes in rate design before the changes took effect so customers could have made informed decisions about water usage.”

In addition to the more than $11 million that will be returned to customers, an important aspect of the agreement is the appointment of an independent monitor paid for by the company shareholders, but responsible to the Department of Public Service and approved by the Commission. This monitor will oversee the company's new internal controls, tax filing accuracy, and improved customer outreach and communications. In the short-term, they will also oversee the company's handling of more than 1,300 complaints that the company has received in recent weeks.

"New York American Water is pleased that the effort to bring rate relief to customers continues to make progress," said a company spokesperson. "We have currently taken every action we can to implement the agreed upon customer rate relief and await the court’s decision. The relief process will take several billing cycles, as the New York State Supreme Court and the Public Service Commission must act before credits can appear on customer bills. Please be assured that all parties are working as quickly as possible and look forward to a speedy resolution."

Photo: Shutterstock