Veolia water company seeks rate increase from PSC with $473M infrastructure proposal
WEST NYACK − The Lower Hudson Valley's major water company has proposed a $473 million infrastructure improvement program that would raise consumer costs in Rockland, Orange, Westchester, Tioga and Putnam counties.
Veolia said in a news release that to keep a strong and reliable water supply flowing throughout the region, the plan would allow the replacement of nearly $300 million worth of infrastructure, such as water mains, service lines and hydrants.
If approved, more than 500,000 homes and businesses in most of Rockland and parts of Westchester, Orange, Putnam and Tioga counties will benefit from a multitude of service reliability, water quality, supply and security projects.
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Veolia proposal raises rates, faces scrutiny over 11 months
The New York State Public Service Commission, clean water advocates, and intervenors will scrutinize the proposal during the next 11 months. The water company's last proposal came four years ago.
If approved by the PSC, the Veolia proposal filed on March 2 would raise residential water bills for customers:
Rockland and Orange county users would pay $5.74 more per month, or $67.68 annually.
Westchester customers would pay $11.80 more per month or $141.60 per year.
Putnam users would pay $5.99 more monthly, or $71.88 per year.
Tioga customers would pay $15.60 more monthly, or $187.20 per year.
Veolia's release said the utility also proposed a low-income discount program with initial funding of $1.5 million. Veolia would contribute $4 million to help lessen the impact of rate adjustments for its New York customers.
Veolia also proposes a surcharge mechanism to pay for the cost of treating drinking water to meet New York state standards that require further reduction of levels of PFOA and PFOS, which are toxic chemicals found in many drinking water supplies in the United States. The surcharge would lessen the impact of the rate increases, as it would not be applied until the company is able to obtain necessary local and state permits for necessary infrastructure and water quality treatments.
The PSC last approved a rate increases for the water company in 2020 for its customers over four years and a merger.
The PSC approved the sale of Suez to Veolia in December 2021. The PSC also required a feasibility study to see if Rockland residents would be better off with local governments controlling their water supply instead of a private company. The study went against public control.
Opposition to proposed rate increase forming
Veolia is the major water distributor in Rockland. The utility serves an estimated 300,000 people in Rockland and also has New Jersey customers, drawing water primarily from the two surface water sources, wells across Rockland County and the Torne Valley, and the Ramapo River in Ramapo. The Nyack Water Department serves about 15,000 people, with water coming from the Hackensack River. The village system supplies residents of Nyack, South Nyack, Central Nyack and parts of West Nyack. Suffern provides village residents with drinking water from underground sources.
Traditionally, some elected officials and the Rockland Water Commission have intervened to oppose water company requests for rate increases and programs like the desalination plant. The Rockland Water Coalition led the successful fight against the plant and supported water conservation. The PSC also has drawn criticism for approving rate increases for water and electric utilities.
Bruce Levine, an attorney and former Rockland legislator from Ramapo, said he has not seen the proposal. But he said he will again be intervening in this rate case and expects the same from Peggy Kurtz of the Rockland Water Coalition and the Sierra Club.
"The case will give us an opportunity to look at a variety of water issues that were supposedly dealt with in earlier cases," Levine said.
Levine cited water conservation, and Veolia taking three years to create a computer system to enable lower rates for the poor, something he said electricity and gas customers have had for decades. He also included "the value or lack of value from operating investments made in the last dozen or so years, and did the mergers approved in the last case lead to any savings or did they increase cost?"
Kurtz said Veolia is seeking a rate increase of 14.25%, apparently over the course of one year. She said that increase, if approved, would be on top of a 34% increase over four years in the previous rate case.
"That’s extraordinary," she said. "How many Rockland residents have gotten those kinds of annual raises recently?"
Rockland ratepayers already pay the highest water rates in the state, she said, citing a 2017 report by New York State Comptroller Thomas DiNapoli. She said consumers also are paying off a surcharge of $39 million plus interest for SUEZ's failed desalination project.
"Given the high cost of water in Rockland and our limited water supply, we also question whether Veolia is doing enough to protect the adequacy of our water supply as we face the potential for more extreme heat and extended drought as the climate changes," she said.
Veolia outlines $473 million infrastructure program
Veolia said its $473 million proposal sent to the PSC on Thursday would enhance service reliability, water quality, supply, safety and sustainability. The utility said the plan features customer improvements that would be implemented across the utility's New York service territory. Those include:
Water main replacements: More than $180 million to replace water mains – the arteries of drinking water systems.
Service lines, hydrants, and meters: More than $115 million to replace underground infrastructure to improve reliability, safety, and billing accuracy.
Water treatment plant upgrade: Continued work on a multi-year, $47 million treatment upgrade at the Lake DeForest Water Treatment Plant to eliminate taste and odor issues. The proposal includes an upgrade to the plant’s electrical system to increase efficiency and reduce greenhouse gas emissions.
Water supply: More than $20 million to replace production wells in Rockland, install additional water treatment to enhance water supplies and rehabilitate or construct storage tanks to improve water pressure and flow.
Safety and security: More than $11 million in supervisory control and data acquisition system upgrades at multiple sites to ensure continued water system monitoring and resistance to cybersecurity threats. Safety improvements at numerous facilities, including additional cameras and access systems, the replacement of fencing, and lighting improvements.
Environmental health: Replacement of system pumps, motors, and power meters to increase energy efficiency and reduce greenhouse gas emissions.
Veolia officials pressed their proposal, which the PSC could alter. In the past, the PSC has cut down on the utility's rate requests and proposals, such as rejecting a desalination plant to use Hudson River water in 2017.
“Veolia is the world’s leader in helping communities provide water to their people, with the highest standards for water treatment, a demonstrated commitment to customer service, and a strong emphasis on ensuring everyone has equitable access to water resources,” said Karine Rouge, CEO of Veolia North America’s Municipal Water division.
“We are devoted to this challenge here in New York, and our investment plan is designed to meet those goals with the full dedication of all Veolia’s resources," Rouge said.
Rouge said when the utility plans "necessary investments in our water system, affordability for all our customers is a chief concern, and that’s reflected in the plan we have put forward. Water is an essential resource, and we must do our part to help those who need it most."
Steve Lieberman covers government, breaking news, courts, police, and investigations. Reach him at slieberm@lohud.com. Twitter: @lohudlegal.
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This article originally appeared on Rockland/Westchester Journal News: Veolia water company seeks rate increase from PSC with $473M plan
