PSC Cuts Water Utility Rate Request

ALBANY - The New York State Public Service Commission (Commission) today established a three-year water rate plan for customers of Liberty (New York Water) Utilities Corp. (Liberty) across its two service territories. The company serves approximately 125,000 water customers in several towns, mainly in the Town of Hempstead, the Village of Sea Cliff, the Hamlet of Massapequa on Long Island, and in the lower Mid-Hudson region.

"With this three-year plan, the company will be able to continue to provide its customers with clean, safe water and to save money by promoting and encouraging conservation and reducing leakage," said Commission Chair Rory M. Christian. "Adoption of this rate plan ensures critical investments that are good for the rates customers will pay, and good for their assurance of safe and adequate service."

The Commission today adopted a joint proposal establishing a three-year rate plan for water service provided by Liberty across its two service areas. Service area 1 is primarily in the Town of Hempstead, with about 3 percent in several disconnected water districts in the Hudson Valley. The service territory includes, among others, the following water supply districts: Beaver Dam Lake, Cambridge, Dykeer, Hoey-DeGraw, Kingsvale, Mt. Ebo, Waccubuc, West Branch Acres and Wild Oaks Districts, and portions of Long Island. Service area 2 consists of water supply districts serving the Hamlets of Merrick and Massapequa and the Village of Sea Cliff on Long Island.

In service area 1, the levelized revenue increases for the first, second and third years will be $13.7 million, respectively, equating to a 17 percent increase in the first year, a 15 percent increase in the second year and a 13 percent increase in the third year. In service area 2, the levelized revenue increases for the first, second and third years will be $3.5 million, $1.8 million, and $1.8 million, respectively, equating to a 9.2 percent increase in the first year, a 4.5 percent increase in second year, and a 4.5 percent increase in the third year.

The new rates go into effect September 1, 2024. The new rate plan will be effective through March 31, 2027. Depending on the service area, a typical residential customer using 8,000 gallons of water per month will pay between $54.51 to $87.32 in the first year. Long Island property taxes are one of the top three drivers for the rate increase in service area 1, after infrastructure and operating and maintenance costs.

The water utility initially sought a $39.7 million revenue increase in the first year across both service territories. Instead of granting the full amount, the Commission approved a first-year delivery revenue increase of $17.24 million across both service territories, a 56 percent decrease.

The potential for municipalization of at least part of Liberty's system remains on the table. On March 29, 2021, staff issued a report saying that municipalization was both feasible and in the public interest. On November 3, 2021, Governor Hochul signed legislation that established the North Shore Water Authority and the South Nassau Water Authority for the purpose of enabling the municipalization of parts of the water system. The next step toward municipalization rests with local officials.

The approved agreement includes health and safety provisions related to lead service line replacement and the funding of capital programs pertaining to the water system, implements a customer assistance program and an arrears management program to address affordability concerns for low-income customers. The approved agreement also includes performance incentives, an earnings-sharing mechanism, and customer service provisions implementing a pilot email customer satisfaction survey, as well as requiring an enhanced customer communications process.

Further, the approved agreement authorizes the company to implement its enhanced water conservation program, which includes water usage audits and rebates related to water saving actions, customer outreach regarding the program, annual reports to monitor participation and costs, and requires Liberty to take various actions related to climate change and the environment.

The significant reduction in the rate increase requested by the company was made possible by the transparent and thorough review of all cost drivers by staff and other parties. In developing this decision, the Commission reviewed a detailed record that included the testimony of parties, and over 160 public comments received, both directly and at three public statement hearings.

Today's decision may be obtained by going to the Commission Documents section of the Commission's Web site at www.dps.ny.gov and entering Case Number 23-W-0235 in the input box labeled "Search for Case/Matter Number". Many libraries offer free Internet access. Commission documents may also be obtained from the Commission's Files Office, 14th floor, Three Empire State Plaza, Albany, NY 12223 (518-474-2500). If you have difficulty understanding English, please call us at 1-800-342-3377 for free language assistance services regarding this press release.

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