Following PSC decision, United Water adopts two-year rate hike

BY MICHAEL RICONDA

United Water New York opted to choose a two-year base rate hike totaling $9.8 million, adhering to a State Public Service Commission requirements and cutting down a rate increase which once stood more than twice as high. Beginning on July 1, ratepayers will see an average increase from $714 to $783 during the first year, then to $840 during the second year. Rates will automatically drop three percent after the two year period.

United Water initially requested a 28.9 percent increase to generate $21.3 million in revenue. However, the PSC determined on Thursday that such an increase would constitute a “grave concern” and could be mitigated while also satisfying United Water’s needs.

“We recognize that in the provision of water services, the company is encountering legitimate increases in capital expenses and property taxes that are not in its absolute control,” Commission Chairwoman Audrey Zibelman said. “However, it is our expectation that on behalf of its customers, the company will adopt aggressive measures to mitigate otherwise controllable expenses as well as look for technologies and other conservation practices that will allow it more effective control over its capital requirements.”

The PSC gave United Water two options. The first was a one year deal to increase rates by 12.9 percent, while the second plan chosen by United Water would increase rates by 9.6 percent the first year, then 7.4 percent the second year. The commission also directed United Water to repair its relationship with Rockland ratepayers by suspending long-term research and development. Those funds and efforts will be redirected to seeking outside help in achieving short-term operational fixes.

The reduced base rate was greeted with satisfaction from elected officials. Legislative Chairman Alden Wolfe celebrated the PSC’s decision and argued continued increases were improper and harmful to residents who already pay unusually high rates.

“Any water rate hike is unacceptable, but the Public Service Commission’s decision to grant United Water the minimum amount allowed within the law is a partial victory and a positive sign,” Wolfe stated in a press release. “It shows that the Public Service Commission has recognized the inefficiencies in United Water’s management and operations and its adversarial relationship with the community.”

United Water was not as enthusiastic about the decision. According to UWNY Vice President Michael Pointing, the decision does not address United Water’s need to finance infrastructure improvements and find long-term solutions to water supply issues in Rockland.

“We are very disappointed the PSC’s decision because it takes a short-term view of the investments necessary to provide stability for our water system,” Michael Pointing said. “We have been making infrastructure investments, especially since 2006 when the Commission ordered us to develop new short- and long-term water supplies, to ensure that our residential and business customers would have a safe and secure supply of water today and in the future.”

United Water might not be in the clear yet, either. Calling the decision “disturbing” and “unacceptable,” Town of Ramapo Supervisor Christopher St. Lawrence promised to file a petition for a re-hearing in an effort to drop the increase to zero. The case does not address the rate increase stemming from the proposed desalination plant in Haverstraw. The desal increase will be addressed in an ongoing surcharge case.

Rockland County Executive Day’s statement on the’s decision by the New York State Public Service Commission on United Water New York’s rate hike request:

“I am extremely concerned about the burden this United Water rate hike will place on already strapped residents and business owners in Rockland County. It’s important to note that the same company which sought to boost the cost of our water by an outrageous 28 percent has now been directed by the PSC to hire a third party to improve operations and strengthen relationships within our communities. Even more troubling is the fact that state regulators granted such a large increase to a utility they believe should be under a microscope. This thinking is counter-intuitive.”