Rockland Sues Suez Water, PSC, and DPS Over Costs Of An Abandoned Project

Jun 27, 2016

The Rockland County executive announced Monday that the county is suing a water company and two state agencies, saying ratepayers should not have to bear the cost of a desalination plant that was never built.

Suez Water New York has before the New York State Public Service Commission a proposed rate hike of an average 13 percent, half of which would go toward recovering some $54 million over 20 years for the Haverstraw Water Supply Project — a planned desalination plant along the Hudson River in Rockland County. In late 2014, the PSC told the company, then known as United Water New York, to walk away from the project, saying there was no longer an immediate need for a new water supply source. Rockland County Executive Ed Day says the county is suing Suez Water, the PSC and state Department of Public Service to ensure ratepayers will not pick up any cost associated with the failed plant.

“Rockland residents should not be left holding the bag for an ill advised and poorly managed project, especially one that no one wanted and one that was ultimately shown to be unnecessary,” Day says.

A PSC spokesman declined to comment, saying the Commission had not yet been served. Suez Water, in a prepared statement, says, in part, “The New York State Public Service Commission’s February 25, 2016, Order concluded that $39 million incurred pursuing the Haverstraw Water Supply Project was done so prudently. The February 25, 2016, Order is legally sound and the County of Rockland’s lawsuit is without merit.”

In November 2014, the PSC determined that United Water New York was not entitled to implement a surcharge to recover its investment costs for the desalination project yet in February this year, the PSC issued an order on rehearing, saying $39.7 million of the $54 million was eligible for recovery. Again, Day.

“In short, Rockland ratepayers are being hosed,” Day says. “And directly involved in that hosing is the Public Service Commission through an abdication of responsibility that they should have engaged in.”

Day says the lawsuit seeks class action status and court intervention. He says United Water submitted more than 9,000 pages of copies of schedules and heavily redacted invoices for legal and other expenses to the PSC regarding the proposed desalination plant.

“The Department of Public Service did not verify these expenses. The Department merely performed a sample audit of these invoices. We allege that the Department of Public Service violated its statutory responsibility by performing a limited or sample audit of the invoices of these expenditures or charges for consultants. Again, this is the ratepayer dollars we’re speaking about,” says Day. “We further allege that Suez violated its statutory responsibilities for imposing unjust or unreasonable charges on ratepayers for its water service.”

In the February rehearing order, PSC concludes that reopening the surcharge proceeding for an in-depth forensic audit is unnecessary. Day says if the PSC believes Suez Water is entitled to recover its costs, the money should come from the state.

And if there is a desire for the PSC to allow Suez to recoup those dollars, let them go to the state,” says Day. “Albany should be paying for this, not the ratepayers of Rockland County.”

The PSC recently held four hearings on Suez Water’s proposed rate increase. The prevailing comments were in opposition to imposing costs related to the desalination project. Suez Water spokesman Bill Madden has said 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.