FREQUENTLY ASKED QUESTIONS AND ANSWERS
When do the new rates become effective?
The new rates were effective June 1, 2017.
Why was the rate change needed?
Our water rates are based on the actual cost of providing water service. The price that customers pay is driven by the amount of the company’s capital investments, which amounts to over $150 million to improve water quality, service reliability and fire protection in the communities we serve since the last rate case went into effect. High-quality, reliable water service is key to meeting our customers needs and necessary for the economic well-being of a community. The Company has also been significantly impacted by rising property tax levels in much of its service territory, while aggressively challenging the legality of its tax assessments. The Company has been able to obtain significant efficiencies in its operations over the past several years, resulting in operating expenses $2.7 million lower than previously authorized levels.
Capital investments include upgrades to water treatment facilities, storage tanks, wells and pumping stations to ensure that your drinking water meets all regulatory standards. This includes the construction of an $8 million iron removal treatment facility in the Town of Hempstead, $3.3 million for 3 portable iron removal filter units, and well replacements and rehabs in Malverne, Roosevelt, and Lynbrook. New York American Water also replaced and rehabilitated more than 33 miles of aging water main, as well as valves, service lines and other parts of its more than 1,200-mile distribution system. While customers have enjoyed the benefits of these system improvements, only a portion of the costs to finance these are covered in current water rates.
Even with the rate increase, our water, delivered straight to your tap, still costs around a penny per gallon. With few exceptions, water will remain one of the lowest utility bills that a household pays.
Water is free. Why should I have to pay for it?
- Providing, operating and repairing treatment facilities to remove contaminants and microorganisms from the water sources.
- Chemicals used to disinfect the water and control the level of acidity and alkalinity.
- Cost of electricity to run pumps and other equipment through the treatment process, and throughout the distribution system into your home or business at pressures sufficient enough to operate most water-using appliances or equipment.
- Staffing costs, i.e., salaries of employees and for the equipment they need to assure that the entire system keeps operating and that the highest quality water is delivered to your home or business.
- The cost to meet the standards of quality and quantity, pressures and service set by federal and state officials as well as New York American Water’s standards, all to protect the health and welfare of our customers.
Providing high-quality, reliable water service to customers requires investment in our facilities and operations to treat and deliver the water to your tap. The need for the rate change was driven by the over $150 million the company spent in its treatment and distribution facilities to help provide safe and reliable water service since the last rate increase.
What has New York American Water done to control costs?
New York American Water employs best management practices and cost containment techniques, while taking advantage of economies of scale to enhance efficiencies and reduce operational costs. As compared to the company’s last rate case, this case includes less operations and maintenance expense – approximately $2.7 million. Many of these enhancements have been in place for a number of years, such as:
- Computer monitoring control systems in most of our treatment facilities, which minimize both operating costs and personnel needs.
- Centralized bulk purchasing of chemicals, supplies, materials, insurance and employee benefits.
- Centralized financial accounting, payroll and cash management systems.
- Customer service programs to better manage workload for field service reps. For example, laptops were installed in service vehicles, moving us from a paper-based to a real-time work distribution system. Information is communicated to and from the field using wireless technology, which has enabled our field representatives to better manage their workload.
- Installation of automated meter reading systems, which increase efficiency and reduce labor costs.
- Investment in leak detection equipment/programs to minimize water lost through water mains.
- Sharing costs with other American Water companies to take advantage of one of the most advanced water testing laboratories in the nation. This laboratory processes the most sophisticated water quality tests for New York American Water at a cost which is less than what the tests would cost if completed at independent testing laboratories.