August 2021
Contributors:
Rajratna Sardar, Tufts University
Erica DePalma, Water Center at the University of Pennsylvania
Miriam Hacker, Water Center at the University of Pennsylvania
Introduction
This report examines the water affordability programs of public utilities in New York state. The most significant constraint on the design and implementation of customer assistance programs (CAPs) is how they can be financially supported. This document studies existing challenges and legal barriers in implementing CAPs in New York state. We also discuss regulatory mechanisms in New York State (NYS) and New York City (NYC) for various customer assistance and affordability programs. In recent years, water rates have risen at a higher rate than the average cost of living s, raising concerns about affordable services. Also, the cost of water continues to increase, and customers’ ability to pay for it has decreased. Customers’ ability to pay water rates that represent the full expenses of providing water service is known as ability-to-pay, or residential water affordability (“DEFINING & MEASURING WATER AFFORDABILITY”, n.d., 6). At a state level, NY private utilities, government-owned utilities, and non-profit water utilities often fall under different economic regulatory frameworks that influence their ability to use rate revenues to fund CAPs.The CAPs for commission-regulated private utilities are restricted because they must be approved before they can be implemented, but once allowed, they will set a significant precedent. The approval of a few utility CAPs by the New York State Public Service Commission (NYPSC) has enhanced the probability that additional private utilities in the state will be permitted to establish them as well. In this report, we are focusing on public utilities and their challenges in implementing CAPs. The scope and complexity of existing CAPs indicate water utilities’ commitment to offering affordable service to all of their customers by seeking more federal and state financial support but, the demand side is significantly larger than what the utilities can meet on their own financials. The water utility sector alone will not be able to achieve long-term water affordability solutions and seek more committed reforms and regulations to strengthen its commitment to developing and sustaining a long-term program to improve the affordability of water services in communities and across New York state. In NYC, the Bureau of Water Supply of the New York City Department of Environmental Protection (NYC DEP) is in charge of the city’s water supply system. The NYC DEP was established in 1977 after the City government’s water supply and wastewater treatment roles were merged. The NYC DEP is in charge of delivering water supply and managing and transporting wastewater and stormwater. Water and sewer charges provide funding revenue for the DEP’s capital and operations budgets. The New York City Water Board establishes the water rate and has public hearings in each borough each year when the City develops its budget for the fiscal year. Through the water and sewer fee, the DEP is able to meet its revenue demands for both wastewater and stormwater management. In the following sections, we will discuss the various types of customer assistance programs and an overview of their implications, as well as the water governance structure in New York State and NYC. We’ll also go over various departments and their functions in relation to water supply, as well as regulatory procedures, problems, and the ramifications of various laws and acts in public water utilities.
You can read the full report here:
Defining Water Affordability in New York State Report
