After previously denying a desired rate increase due to financial irregularities and other problems, the state Public Service Commission has relented and awarded Suez, formerly United Water, $31 million of the $39 million in loot the company desired to recoup from ratepayers following its investment in a since-shuttered desalination plant.
Rates for the average water customer will increase 51 cents per month in 2017, followed by hikes of of $4.80 and $4.87 in 2018 and 2019 or increases of 0.8 percent and 5.6 and 5.3 percent. Suez can still reject the deal and impose a $3.64 increase for 2017, while further hearings commence.
At the recommendation of state regulators that more water supply was needed in Rockland County, in 2009 then-United Water began plans for the creation of a desalination plant on Haverstraw Bay. After a few years, the state shut down the wildly unpopular proposal but only after Suez spent almost $40 million dollars on the project.
The Public Service Commission (PSC) ruled that customers will pay for all but $8 million dollars for the state-mandated project. In 2014 when the state shuttered the project they at rejected Suez’s requests for ratepayer reimbursement partly due to financial mismanagement at the company, which state regulators noted was first exposed in a Rockland County Times column
Rockland County Executive Ed Day and his office filed a lawsuit against Suez attempting to block them from retrieving the $38 million the company says was spent pursuing the desalination plant.
“The fact of the matter is that PSC, a state agency, did not provide oversight. They allowed a runaway process to continue at the cost of millions. And now they’re going to the ratepayers who did absolutely nothing to incur this cost and asking them to pay the bill. That is absolutely wrong,” said Day.
County Attorney Thomas Humbach said if the lawsuit is successful, it could cause the PSC to reduce the rates.
Rockland Business Association President Al Samuels said Suez deserves to be reimbursed for what it spent on the desalination plant because the state wanted to find a way that the county’s water supply could be strengthened.
“Suez did not create this situation. They invested a sum of money to come up with something they were ordered to do by the state,” Samuels said. He also said Suez was “left hanging” when the state pulled the plug on the project.
This has led other critics to remark that if anybody should reimburse Suez it ought to be the state. However, the state has no law allowing such a form of reimbursement.
Suez Water spokesman Bill Madden did not give the PSC’s ruling a ringing endorsement. He said in an email, “This is a very complex and lengthy ruling that deserves very careful consideration. We will analyze the order thoroughly before we respond to the PSC and to our customers.”