Potential Buyers are Looking at American Water’s Nassau County, NY Property

​We’re taking a look at eminent domain issues that are close to home this week. On Long Island, New York, the Massapequa Water District is proposing to carve off a $21.6 million section which could result in a pubic takeover of parts of New York American Water’s Nassau County property. The State Senate is passing a bill proposing a new water authority.

The district has said that it is prepared to negotiate “immediately” over a purchase of the East Massapequa portion of the system which will “begin operation by January 1, 2021.” It will include a savings for customers derived from a lack of profit incentive and no tax payments. If the negotiations fail, guess what will happen next - you got it -- the district said that it would use its eminent domain authority to take over the system if the negotiations fail.

The Massapequa Water District valued the portion of the New York American Water’s East Massapequa district with approximately 5,359 customers and infrastructure of $21.6 million. This also includes three wells and one storage tank.

Like the old Ronco ads used to say...but wait! There’s more! New York American Water has already secured an agreement to be sold to Liberty Utilities of Canada for $607 million. The deal has been scheduled to close between July and December. The Public Service commission is trying to stop the deal by requesting bids from public authorities or water districts to acquire all or part of the 120,000-customer system in Nassau county by August 3. The PSC has extended the period for proposals through mid-October.

The State Senate passed legislation that would provide a framework to establish the North Shore Water Authority, part of a plan that would allow approximately 4,500 Sea Cliff customers of New York American Water to municipalize if a feasibility study finds it’s economical. A citizens group in that district call the North Shore Concerned Citizens, has proposed joining the territory with the Jericho Water district. A watchdog group said that these moves are a positive step away from private ownership of the water system.

State Senator Jim Gaughran (D-Northport) said that New York American Water, “for years has overcharged ratepayers and profited off the backs of Long Islanders.” 

Companion legislation would have to pass in the Assembly and then be signed by Gov. Andrew Cuomo. The district covers ratepayers in Sea Cliff, Old Brookville, Roslyn Harbor, Glenwood Landing, Glen Head, and Glen Cove.

The Town of Hempstead, whose previous studies found the prospect of a water takeover to not be feasible, recently announced a new procurement for “valuation services and a feasibility study” related to “potential acquisition” of New York American Water assets within the town.

In 2018, the Massapequa Water District inquired about a takeover. Consultants had assured the district that acquiring the customer base and adding customers to its own billing and mapping system “would not be an overly difficult undertaking.” 

It’s never difficult... until it is. Let’s see how this one unfolds!