Public Service Commission Issues Decision in Suez Rate Case

On January 24, the NYS Public Service Commission issued an unusual decision regarding an agreement between Suez and PSC Staff for a rate increase and conservation plan. Listening to hundreds of comments from Rockland elected officials and ratepayers, the Commissioners modified the proposal. We recognize that it is very rare for the Commission to modify a proposal. At the same time, we are disappointed with many aspects of this decision.

The final decision still allows the company to be reimbursed for nearly all of its planning costs for the failed desalination plant which was never constructed. Equally important, the conservation plan should be stronger to maximize this most cost effective way to increase water supply before turning to more expensive and harmful infrastructure projects.

Nonetheless, when we compare the final results to where we were a few years ago, facing an energy intensive, massively expensive desalination proposal that would have left us with trace amounts of radionuclides in our drinking water, we have accomplished a lot.

On February 23, the County and several other parties filed petitions for a rehearing. That could lead to further lawsuits against the PSC for “arbitrary and capricious” decisions.

So what did we end up with?
  • Desalination is off the table. Now it is up to Rockland ratepayers to make conservation work, in conjunction with accelerated repair of leaks by Suez.
  • Suez will still recover almost $54 million in planning costs for their failed project. With interest over 15 years this will cost the ratepayers almost $79 million. The PSC cut both the capital and rate of return slightly. Over the series of cases, the capital was reduced from $62 million to $54 million.
  • The target from conservation and leak repairs has been increased from 2 million gallons per day to 3 million gallons per day. It is not entirely clear where that increase comes from, but it appears to be in the rebates. Unfortunately a very high proportion could be from “free riders”, as it is still unclear how many people will be moved to install new toilets for the $75 rebate.
  • A program to help low income customers will be developed. This program could include a “direct install” program, which would include free installation of water efficient fixtures. Direct install was the recommendation from our expert.
  • A conservation rate structure based on usage will replace the current winter/summer rates and will include a special drought rate. While we are disappointed that this rate structure reduces summer rates for many users, the new rate structure will penalize larger water users.
  • Penalties and incentives: The company will face financial penalties and incentives up to about $1.5 million for performance on its rebate plan.
  • Suez leak repair plans were increased from the current .24% of pipes per year to 1% by 2020, a very significant increase which brings them up to industry standards. (This is subject to a spending cap.)
  • Suez leak repair plans are now strengthened by potential penalties. (Non-revenue water loss must be brought below 18% from a current rate of about 24.55%) The non-revenue water loss goal is now set for 15%.
  • Water quality: The company will hire a water quality specialist and must report on water quality more frequently.
  • Rebates and water audits: The company will offer rebates for toilets and other fixtures and will provide some water audits and contractor training workshops.
When we look back, in 2013 Suez was touting its desalination plant as a “done deal.” We have come a long way in the last nine years, defeating a project which would have likely cost more than $200 million in construction costs, while harming irreplaceable habitat in Haverstraw Bay and exposing residents to trace levels of radioactivity which could not be removed.

The Rockland Water Coalition looks forward to working productively with the Rockland Water Task Force and Suez to move forward with steps the county and public can take to build on the conservation plan in this rate case decision.

Read the following press coverage following the decision:

Read the following press coverage preceding the decision: