American Water Works Co. announced in a release Wednesday that it would sell its New York operation to Liberty Utilities for $608 million cash. The deal follows years-long criticism from Nassau County ratepayers, lawmakers and watchdogs who have questioned the private company’s rate structure, water service and infrastructure management.
The sale is expected to close by late 2020 following approval by the state Public Service Commission, according to the release.
“After a careful and comprehensive analysis, we believe it is in the best interest of our customers in New York to sell to Liberty,” said NYAW President Lynda DiMenna in a letter to local ratepayers Wednesday. “We are committed to working together to ensure that the transition is unnoticeable . . . and that safe and reliable water service continues throughout the transition and beyond.”
NYAW services nearly 120,000 Nassau residents across three districts: Lynbrook, Merrick and Sea Cliff.
A sub-utility of Algonquin Power & Utilities Corp., Liberty owns and operates water, wastewater and energy utilities in 14 states, and services over 800,000 customers. DiMenna indicated that Liberty already manages utilities in New York, and would “have a larger presence in New York once the agreement closes.”
“We are excited to expand our customer base in the great state of New York, and to bring our experience in multiple states as a water utility operator committed to excellence,” said Algonquin’s CEO, Ian Robertson, in the release. “We also look forward to welcoming New York American Water’s employees to our Liberty Utilities team.”
A spokesman for American Water said the company has spent “significant time and effort over the past several months” negotiating the sale with Liberty. DiMenna added that the acquisition would not impact customers’ water rates, and that the utility is working with NYAW, regulators and state officials “to ensure the affordability of water services,” she said.
Officials and residents who have spoken out against the company were quick to respond to the announcement. State Sen. Jim Gaughran, a Democrat from Northport who represents Sea Cliff ratepayers, said the fight for public water would not stop here.
“I will continue working closely with the community towards a public takeover,” he said in a prepared statement, “and will be vigilantly monitoring this sale to protect ratepayers from any further abuse or exploitation.”
A representative from State Sen. John Brooks’s office said the senator was meeting with various stakeholders Thursday to discuss possible ramifications and next steps as the company moves to sell. Brooks, a Democrat from Seaford, represents Merrick ratepayers.
Long Island Clean Air Water and Soil, a Merrick-based advocacy group, urged the PSC in an emailed newsletter to authorize a public takeover “instead of approving a private sale,” thus removing the profit incentive.
“Enough is enough,” said LI CAWS Co-Director David Denenberg. “We demand a public takeover now.”
More to follow.