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PSC Cuts United Water's Proposed Rate Increase

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The New York State Public Service Commission has rejected a requested water-rate increase in the Hudson Valley. The PSC also wants a third party to independently review management and operation practices.

The Public Service Commission denied United Water New York’s request to increase its revenues $21.3 million, or nearly 29 percent. United Water, which serves about 74,000 customers in Rockland and Orange Counties, had filed nearly one year ago the request for a nearly 20 percent rate hike. That would have amounted to about $12 more per month for the average customer. Instead, the PSC gave United Water the choice of increasing rates by either just more than 13 percent, or close to 10 percent, under one- and two-year options. Deb Rizzi is a spokeswoman for United Water New York and describes the increase for the average, residential water customer.

“Well, United Water selected the two-year option and essentially that translates into $5.75 a month, an increase in the first year and $4.75 a month in the second year,” says Rizzi. “And that remains about a penny a gallon for water tested, treated, and delivered to customers’ homes.”

The new rates became effective July 1.

“I think we were disappointed in the rate increase,” says Rizzi. “I think what we’re trying to do as a company is take a longer term view of water supply and meeting long-term water needs.”

She adds:

“Over the last eight years, United Water has invested $175 million in infrastructure improvements and that’s all part of some long-term planning to be sure that our customers continue to have safe and reliable water well into the future,” Rizzi says.

George Potanovic is a founding member of the Rockland Water Coalition.

“It’s a decision that indicates the Public Service Commission is telling United Water that it needs to do a better job of managing its costs and managing its operations,” says Potanovic.

He adds:

“We think it’s too much, to tell you the truth. We were going for a zero increase. The company doesn’t deserve it,” says Potanovic. “They’ve increased their rates over the years. Last year they doubled the payment to the stockholders, they increased it by twice. They’ve been doing pretty well and have gotten mostly in the past all the high rate increases that they’ve asked for.”

The PSC found that the company was only entitled to increase revenues to cover increases in local property taxes and required investments in the water system plus small increases in labor and other operating expenses. The PSC also directed United Water to hire a third party to independently review management and operation practices. Again, United Water’s Deb Rizzi.

“We’re very confident that third-party review will show that we are operating very efficiently and we’re making important decisions that are cost-conscious and make sure that we continue to operate in a manner that provides our customers with reliable service,” says Rizzi. “So we’re very confident that the findings of the management review will show that we’re operating very efficiently.”

She says United Water has 10 months to complete the review, by April 2015.

Potanovic says he hopes the money from the rate increase goes toward reducing demand for water and conservation measures.

“Rockland County has started a task force that is going to be investigating how we can better manager our existing water resources. And United Water is going to have a seat on that task force,” says Potanovic. “It would be good if United Water could use some of its revenues gained from this rate increase to help fund that effort so that we can hire the experts that are needed to find better ways that we can manage our existing water resources in Rockland.”

This rate increase decision is separate from United Water’s proposed surcharge for costs incurred for a yet-to-be-built water desalination plant in Haverstraw, known as the Haverstraw Water Supply Project. In May, the PSC issued a report finding that while there is a still a long-term need, a decision on how to meet it will be pushed back from 2015 to 2020.

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