United Water’s Argument For Desal Plant Leaks Like A Sieve

Posted by on Jun 30, 2011 | 0 comments

By: Bob Dillon

“On December 14, 2006, a New York State Public Service Commission (PSC) Order adopted a three-year rate plan for United Water New York. “The Joint Proposal”, an agreement that was signed and adopted as part of the order, requires United Water to, among other things, develop an additional, sustainable water supply to meet the growing needs for water in Rockland County over the next 20 years. The PSC and the parties to the Joint Proposal found that it is in the best interest of United Water’s customers and for the company to develop new sources of water supply. The parties to the Joint Proposal are: United Water New York, PSC Staff, the Town of Ramapo, the County of Rockland, the Rockland County Fire Chiefs, former Rockland County Legislator and now New York State Assembly Member Ellen Jaffee, and others.” (See: Haverstraw Water Supply Project)

Inadequacies of “The Joint Proposal”

What Was Not Considered

Rockland County Water-Resource Assessment

In March 2004, Rockland County Legislator Ellen Jaffee, Chair of the Environmental Committee, and County Executive Scott Vanderhoef announced a proposal for a comprehensive assessment of Rockland County’s groundwater supply to be conducted by the United States Geological Survey (USGS) in order to provide information and data to quantify groundwater resources within Rockland County.   The Rockland County Water-Resource Assessment was completed and released to public in February 2011.

The New York State Public Service Commission (NYSPSC) and the parties to the Joint Proposal did not have the results of the recently completed United States Geological Survey Rockland County Water-Resource Assessment before entering into the “Joint Proposal” agreement.  The assessment indicates that Rockland’s ground water resources are more abundant than thought in 2006 and that the year-to-year recharge rate of Rockland’s aquifer is sufficient to replenish United Water’s wells and other wells that are drawn down during peek demand months. Review of pumpage and water-level data from the bedrock aquifer back to 1989 suggests that there has not been a continuous downward trend in groundwater levels across the aquifer.

Lake DeForest Decision of 7-23-1952

The PSC and the parties to the Joint Proposal did not consider how much of Rockland’s water was being exported to New Jersey in excess of United Water’s Lake DeForest operating permit. The New York State Department of Environmental Conservation (NYSDEC) fined United Water in 2007 for excessive releases from Lake DeForest earlier that year.

The Lake DeForest Decision of 7-23-1952 authorizing the construction of Lake DeForest states that the reservoir was to be operated solely for the benefit of Rockland County citizens.  “The only benefit to the Hackensack Water Company (United Water New Jersey) and the people of New Jersey is the incidental benefit of a regulated flow in the (Hackensack) river.” (Page 10 paragraph 37)

During times of drought from 1991 through 2002 the Excess Flow From Lake DeForest averaged 1.66 million gallons per day at times of County of Rockland Mandatory Water Use Restrictions and 5.26 million gallons per day at times of County of Rockland Intense Observation of Water Resources.

In April 2010 Dr. Daniel M. Miller, Bureau Head for the Water Supply Bureau of the Rockland County Department of Health gave testimony to the PSC regarding United Water’s request for a rate increase.  As part of his testimony Dr. Miller concluded that; on average from 1965 to 2008 an additional 19.25 million gallons per day more than required was flowing to New Jersey for use by United Water New Jersey. (See: Dr. Daniel M. Miller PSC Testimony 4-30-2010 Page 22 lines 6 through 11)

On November 4, 2010 the Legislature of Rockland County unanimously adopted a resolution calling for the NYSDEC to conduct a 50-Year Audit of United Water’s operations at Lake DeForest separate and apart from NYSDEC’s consideration of a potential desalination plant, in order to accurately evaluate and assess the water needs of Rockland County.

Lake Tappan Decision of 7-22-1965

The PSC and the parties to the Joint Proposal did not consider the possibility of additional water supply from Lake Tappan.

On 5-19-1965 the State of New York Department of Conservation Water Resources Commission (NYSDEC) conducted a public hearing in the matter of an application by the Hackensack Water Company (United Water New Jersey) for approval to provide additional reservoir storage for stream flow regulation on the Hackensack River in Rockland County, New York.

Testimony was given regarding the expected increase in yield from the Hackensack River and Rockland County’s riparian rights to additional water supply from the river as a result of building Lake Tappan.

George H. Buck, P.E., President, Hackensack Water Company, testified that the safe yield of the Hackensack River would be increased by 10 million gallons per day from 67 million gallons per day to 77 million gallons per day; that it would be possible to bring Lake Tappan’s water back to Lake DeForest and that it was the water company’s intention to put a pumping station somewhere at the head of the reservoir and pump water up to Lake DeForest. (See: Lake Tappan Hearing of 5-19-1965 Pages 29,33,40)

George O’Keefe, Public Health Engineer, testified for the New York State Department of Health that a portion of Lake Tappan’s yield should be allocated to the use of Rockland County. (See: Lake Tappan Hearing of 5-19-1965 Pages 49-50)

Arthur J. Prindle, Esq., Town Attorney for the Town of Orangetown argued during his cross-examination of George H. Buck that Rockland County should receive an additional allocation from the Hackensack River of 5 million gallons per day, half of the expected 10 million gallons per day increase in yield expected to be created by Lake Tappan. (See: Lake Tappan Hearing of 5-19-1965 Pages 41 through 45)

On 7-22-1965 the New York State Department of Conservation (NYSDEC) ruled that “In granting its approval of the instant application the Water Resources Commission in no way relinquishes its right to consider any future application which may come before it for the taking of- a supply of water from the Hackensack River in New York State whether from the River Vale Reservoir (Lake Tappan) or otherwise.” (See: Lake Tappan Decision of 7-22-1965 CONDITIONS Pages 5 and 6)

Lake Tappan with its entire watershed located in Rockland County and flooding into Rockland County as far upstream as the Village of Nyack’s water treatment plant north of Route 59 in West Nyack, near the Palisades Center Mall, has increased the yield of the Hackensack River by approximately 19 million gallons per day in the peak demand months of June through October.  Together Lake DeForest and Lake Tappan have increased the yield of the Hackensack River by approximately 27 million gallons per day in the peak demand months of June through October. (See: Increase in yield of Hackensack River)

Despite the Lake Tappan Decision of 7-22-1965 and the proven increase in yield to the Hackensack River, the PSC and the parties to the Joint Proposal did not consider exercising Rockland’s riparian rights to additional water supply from the Hackensack River.

The Economic Cost to Rockland Residents

The PSC and the parties to the Joint Proposal did not consider the economic cost of Hudson River desalination. From testimony to the New York State Public Service Commission on 3-8-2010 by Michael J. Pointing, United Water New York Vice-President and General Manger.

“The Haverstraw Water Supply Project is currently estimated to cost approximately $140 million when completed.”  “This is significant and should be considered in relation to the overall customer cost upon completion of the facility which could easily approach $270 to $300 per customer per year.  The equivalent of a phase-in through incremental surcharges will lessen the rate shock that would otherwise exist.”

(See: Michael Pointing PSC Testimony 3-8-2010 Page 36 Line 23 through Page 38 Line 2)

United Water’s proposed Hudson River Desalination Plant will cost United Water’s 70,000 Rockland customers an additional $19 million to $21 million per year according to Mr. Pointing’s estimates.  The actual additional cost could be at least $34 million per year or $485 per customer per year. (See: Annual Cost To Customers Of Hudson River Desalination)

The Escalating Cost of The Haverstraw Water Supply Project

On 1-15-2007 United Water filed with the NYSPSC a description for a long-term major water supply project for Rockland County now known as the Haverstraw Water Supply Project.  The estimated cost of the project was $98 million. (See: United Water New York Long Term Water Supply Project 1-15-2007 Pg. 8)

On 1-12-2010 the Clarkstown Town Board hosted a town board workshop on United Water’s proposal to desalinate and treat water from the Hudson River for Rockland’s drinking water.  When asked how much the project would cost when completed?  Michael J. Pointing, United Water New York Vice-President and General Manger responded, $116.5 million.

On 3-8-2010 in testimony submitted to the NYSPSC Michael J. Pointing stated, “The Haverstraw Water Supply Project is currently estimated to cost approximately $140 million when completed.” (See: Michael Pointing PSC Testimony 3-8-2010 Page 36 Line 23 through Page 37 Line 2)

In only 38-months the estimated cost of constructing The Haverstraw Water Supply Project increased by $42 million, nearly 43 percent.

The North Rockland “Ratable” Myth

In its Haverstraw Water Supply Project Executive Summary United Water argues, “The Proposed Project is expected to generate a substantial increase in property tax revenues (primarily to the North Rockland community) from the improvement of the Project Sites.” and that “As a result, the Proposed Project is expected to have a net positive effect on the local and regional economies of Rockland County and New York State.”

Estimated annual real estate tax revenues to the North Rockland community are:

$2,649,470 upon completion of its first phase, in 2016,

$3,483,860 at the conclusion of its second phase, in 2021, and

$5,580,455 in year 2030, when the Proposed Project is fully built out

(See: Haverstraw Water Supply Project Executive Summary Socioeconomics Page S-6)

The Haverstraw Water Supply Project Executive Summary does not mention the higher water rates, which will be paid by North Rockland residents as a result of this project.

However, United Water expects that water rate increases could easily approach $270 to $300 per customer per year.  As noted above the cost estimates for this project have increased rapidly.  The actual additional cost could be at least $485 per customer per year.

The Haverstraw Water Supply Project will have an adverse effect on the North Rockland economy.  Approximately 12,000 of United Water’s 70,000 Rockland customers reside in the North Rockland area.

Estimated increase in the annual cost of water to the North Rockland community:

At $270 per customer per year $3,240,000

At $300 per customer per year $3,600,000

At $385 per customer per year $4,620,000

At $485 per customer per year $5,820,000

North Rockland community will only profit from The Haverstraw Water Supply Project if real estate tax revenues exceed the increase in the cost of water to North Rockland customers.

Based on current estimates the aggregate tax revenue will exceed the aggregate increase in the cost of water to North Rockland customers in the year:

2030 at an increased cost for water of $270 per customer per year

2032 at an increased cost for water of $300 per customer per year

2050 at an increased cost for water of $385 per customer per year

Never at an increased cost for water of $485 per customer per year

(See: North Rockland Real Estate Tax Revenue Compared To Cost and Annual Cost To Customers Of Hudson River Desalination

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