Costs

Costs

If this proposal is approved, Rockland County residents and local businesses will be permanently locked into higher water bills. Desalination is an energy-intensive technology and costs will escalate as energy costs rise. In addition, residents will forever pay capital expenses for United Water’s construction (currently projected at between $139.2 to $189.3 million.) According to United Water’s advertising, the project would bring in new tax revenues. In fact, those new tax revenues would be generated by higher water rates for everyone.  We also question how many permanent jobs the plant will create.


Graphic: Escalating Cost of Havertraw Water Supply Project

PDF: Slide presentation on The Real Cost of Desalination


The Escalating Construction Cost of the proposed 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)

The Project is now expected to cost between approximately $139.2 million and $189.3 million at completion.
(See: Haverstraw Water Supply Project DEIS Executive Summary Page S-10, PHASING AND PROJECT COST)

Hudson River Desalination:
The Economic Cost to Rockland Residents

The Haverstraw Water Supply Project is currently estimated to cost approximately $139.2 to $189.3 million when completed (Haverstraw Water Supply Project DEIS chapter 2)

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.

In October 2009 United Water produced a PowerPoint presentation regarding the proposed Hudson River Desalination Plant. In that presentation the annual revenue requirement was estimated to be $25.1 million. (See: United Water PowerPoint; Orlando, Florida 10-13-2009 slide 8)

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 North Rockland “Ratable” Myth

In its Haverstraw Water Supply Project Draft Environmental Impact Statement 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:

  • $2,950,000 upon completion of its first phase, in 2016,
  • $3,990,000 at the conclusion of its second phase, in 2021, and
  • $6,340,000 in year 2030, when the Proposed Project is fully built out

(See: Haverstraw Water Supply Project DEIS Executive Summary Pg. S13 S.4.4. SOCIOECONOMICS)

The Haverstraw Water Supply Project Draft Environmental Impact Statement 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

The 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:

  • 2022 at an increased cost for water of $270 per customer per year
  • 2029 at an increased cost for water of $300 per customer per year
  • 2038 at an increased cost for water of $385 per customer per year
  • 2089 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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