PSC Hearing On Suez Water's Proposed Rate Hike Draws Critics

Jun 17, 2016

The New York state Public Service Commission held its final public hearing last night on a proposed rate hike from a water company that serves customers in Orange and Rockland Counties. Speakers condemned the company’s request to recover millions of dollars from a scuttled desalination plant as part of the proposed increase.

The hearing at Rockland Community College in Suffern was the last of four held over two days that sought input on Suez Water New York’s proposed rate hike. Bill Madden is spokesman for Suez Water New York, a subsidiary of Paris-based Suez.

“So the proposal that we submitted to the PSC calls for an average of about 13 percent rate increase,” says Madden. “Half of that is related to recovering costs associated with the Haverstraw water supply project.”

That project was to build a desalination plant along the Hudson River in Rockland County. It faced strong opposition from local elected officials and community members. The PSC in November 2014 told then United Water New York to walk away from its plans, saying there was no longer an immediate need for a new water supply source. Now, Suez Water is asking to recoup some $54 million over 20 years for the failed project, which also is drawing strong opposition, including from Theodore Arin, President of the Rockland County AARP.

“The corporation should pay for their mistake, not the ratepayer,” says Arin. “Should not pass on their boo-boo to the ratepayer, as simple as that.”

Suez Water’s Madden says most of the comments in all the hearings have been similarly critical.

“The most popular comment has been displeasure with our proposal that customers would pay for recovery of the cost of the project,” Madden says.

Attorney Dan Duthie also takes issue with that recovery cost. Duthie represents a municipal consortium that is an intervenor in the process, meaning it has a seat at the table in the rate proceeding.

“The Commission got it right back in November of 2014. They said, you will not get a surcharge because construction hasn’t started. Well, guess what? Construction’s never going to start. The project has been abandoned,” Duthie says. “That order should stay in place, and they should eat the money that any corporation would wind up eating and not foist it on ratepayers with nothing to do with a ridiculously expensive project that doesn’t belong in the Northeast.”

In addition to recovering failed project costs, Suez officials say the rate increase is needed to meet property tax increases. The rate hike also would fund infrastructure investments, fix leaks in the system and recover lost water and implement a five-year conservation program offering customer rebates for large appliances and recommending a new tiered rate structure. Kate Hudson is among those who say the conservation plan is bare bones and falls short of having any significant impact. Hudson is director of Cross Watershed Initiatives for environmental group Riverkeeper, whose concern focuses on water sustainability. She says the PSC has an opportunity to lead in the way it is doing so via Governor Andrew Cuomo’s Reforming the Energy Vision.

“I do think this is the first situation coming down the pike that what happens here could be a model, will be a model, it could be a good model or a bad model, for the way in which these kinds of issues are handled  across the state,” Hudson says. “And so I think it’s particularly important for the PSC to step up.”

Again, Suez Water’s Madden, addressing the conservation portion.

“We submitted a robust plan which we’re very happy with. We retained a nationally respected consultant to help us formulate it,” says Madden. “We sent out 15,500 surveys to Rockland residents so we had a lot of data from Rockland residents and customers.”

He says the average monthly bill for a residential customer would go up by $8 a month under the proposed increase, which, if approved, would take effect February 1, 2017.