Two sister companies that provide water in lower Westchester County are looking to merge, a move that will increase some customers”™ bills by more than 15 percent over the next three years.
The Public Service Commission, the agency that regulates utilities in the state, is considering a plan that would merge United Water New Rochelle Inc. and United Water Westchester Inc., both owned by the French conglomerate Suez Environnement. As sister companies, the two already share some services, but a merger would reduce administrative costs by $187,000 in the first year as a combined entity, according to the companies.
A contingent of elected officials and residents have lined up against the proposal, though, questioning the rate increases tied to the merger. At a public hearing at New Rochelle City Hall on Aug. 5, city resident Joyce Furfero told commission representatives she didn”™t understand why allowing a merger meant also raising rates.
“If anything, we should be lowering rates as a result of a merger,” she said.
United Water New Rochelle serves 144,000 customers in areas including New Rochelle, Eastchester, Tuckahoe, Pelham Manor and Ardsley. United Water Westchester has 54,000 customers in Rye, Rye Brook and Port Chester.
The rate increases after the merger would weigh more heavily on ratepayers that are currently customers of the New Rochelle company, with a 14 percent increase in the first year and 1.6 and 2.7 percent increases in the second and third years, respectively. The average customer”™s bill would jump from $68.50 to $85 a month over the three years.
Customers of United Water Westchester would see their bills increase 1.4 percent in the first year and 3.4 and 3.3 percent in the second and third years, respectively. The average bill would increase from $67.17 to $67.83 monthly over the three years. The rate hikes would be larger for United Water New Rochelle customers because the company has more infrastructure than its counterpart, according to a spokeswoman.
State Assemblywoman Amy Paulin, a Scarsdale Democrat, said that the proposed increases outpaced both the rate of inflation ”” which is slightly less than 2 percent this year ”” and the state-imposed property tax cap that limits the amount municipalities can increase their taxes annually. She said the proposed increase would provide the new company, which she categorized as a “low risk business,” with a rate of return on equity of 9.2 percent.
“Investors should not reap high profits at the expense of ratepayers who do not have any choice in their supplier of water,” Paulin said. She was one of many elected officials who spoke against the proposal during the public hearing in New Rochelle and a second in the city of Rye. A consortium of the elected leaders of local municipalities filed a letter of opposition through an attorney that is now on file with the commission.
United Water spokeswoman Deb Rizzi said the two main cost drivers for the companies are infrastructure and capital investments. She said the company has spent an average of $1,300 per customer connection in the last five years and expects to invest heavily in upgrading infrastructure. Rizzi said as much as 27 percent of a customer”™s bill goes to paying real estate and franchise taxes.
“These rates meet our needs and they are substantial,” she said.
The companies initially filed their joint request in November that included a one-year rate change. After negotiations with the Department of Public Service, Rye, Rye Brook and Port Chester, the companies came back with a finalized proposal that spread out the increase over three years and had a second option that would “levelize” increases by spreading out the year one increase into years two and three.
If the merger is approved, the new company would take the name United Water Westchester.
Two things to correct. First the billing is not charged monthly, but quarterly.
In 2010 our minimum bill was 39$. The current minimum may be around 68$ for New Rochelle customers, but notice that with increased surcharges and taxes, the final bill for a minimum customer like us is close to 100$, that is almost double from what we paid in 2010.
New Rochelle Water already increased their minimum rate by 6$ in the last quarter.
With another hike in water fees plus added surcharges and taxes, I am not sure how small households and retired customers are supposed to pay for that.
I suggest to create a just rate, as a small household we notice that the Minimum rate of CCF is much more than we use. Without a minimum rate, customers only pay for what they use and saving water is encouraged and not penalized.
Our billings are quarterly in Rye Brook, too. But that may change soon. When and if the rate hikes are approved, United Water plans to switch to monthly bills. UW could also get permission to stop billing us a minimum charge and start billing a fixed service charge instead. The fixed charge would be based on the size of our meters, if I’m reading the proposal correctly.
Regret to inform you but if the Joint proposal before the NYS Public Service Commission is approved one of the terms it contains is that the billing for all of its customers will become MONTHLY BILLING !!!