United Water Applies for Desal-Related Rate Hike

United Water has officially requested from the state permission to impose a $5 per month surcharge to pay for the first phase of the desalination project.

See United Water’s press release: 

 

WEST NYACK, NY, June 14, 2013 – United Water New York announced today that it filed a petition to the New York State Public Service Commission (PSC) for a surcharge related to the development costs of a new long term water supply project mandated by the PSC. The Haverstraw Water Supply Project will purify water from the Hudson River using a treatment process, including reverse osmosis.

The proposed surcharge would go into effect on August 1 and would include projected costs through July 31. United Water’s projected investment through the end of July is approximately $56.8 million (including $10.6 million in carrying costs). These pre-construction development costs include the selection process, preliminary design, engineering, permitting, pilot plant testing and the extensive legal approval process. If granted, the surcharge would add $4.96 a month to the average residential water bill for a family of four. Based on current rates, the average annual bill would increase 8.08% (from $736.71 to $796.25) as a result of the first surcharge.

The surcharge mechanism will gradually phase in the increases before the project goes online. Immediate implementation of the surcharge would save customers over $23 million in deferred carrying costs and taxes that would otherwise be paid by them.

In 2006 because of a history of droughts and a serious projected water shortage, the PSC ordered United Water to have a new long-term water supply online by the end of 2015. Under the terms of the 2010 rate order, United Water is permitted to file for a surcharge once significant construction begins on the project.

“We were set to meet our construction milestone in May,” said Michael Pointing, vice president and general manager of United Water New York. “However, we were unable to do so because the New York State Department of Environmental Conservation (DEC) has not yet issued its Final Environmental Impact Statement (FEIS), the prerequisite which would enable us to put a shovel in the ground. For weeks, we have understood that the DEC has had all the necessary information to file the FEIS.”

“We are not aware of any scientific, technical, or other substantive reason preventing DEC from issuing the FEIS,” Pointing continued. “The inexplicable delays are related to matters which are outside of United Water’s control. Because of the indefinite delays, we petitioned the PSC to allow the company to recover its costs and immediately implement a surcharge.”

Pointing explained that the Haverstraw Water Supply Project has been subject to a remarkably thorough administrative review, including meticulous and transparent evaluation under the New York State Environmental Quality Review Act (SEQRA) led by the independent professionals at the DEC. As part of the SEQRA process and at DEC’s direction, the company developed information for the FEIS which now includes 1,500 pages detailing all aspects of the project. More than 70 experts were consulted, many alternatives were studied intensively and information was shared with state agencies.

“Clearly, this project is critical to the county’s future because Rockland is facing a water supply shortage,” said Pointing. “The need for more water was reaffirmed by the head of the Rockland County Water Supply Bureau just three months ago. That’s why United Water is still committed to the project and to getting it online without further delay. It’s important to note that more than 221,000 individuals representing business, labor and community groups support the need to move forward. They recognize that prolonged delays increase cost as well as the potential for public health and safety concerns, fire protection problems, a building moratorium and economic development issues.”

In addition to the surcharge, which is related solely to the Haverstraw Water Supply Project, United Water anticipates filing a rate case to recover capital investments and operating costs that have increased since the company was last granted a rate increase in 2010.

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