As Water Shutoff Moratorium Nears Expiration, Hochul Administration Isn’t Enforcing It — or Distributing Federal Water Aid

A few winters ago, 69-year-old Mike Haury suffered a stroke and had to leave his job as a bus driver for six months. Unable to survive a Buffalo winter without gas and electricity, Haury decided he would stop paying his water bills.

“I bought four gallons of water a week to flush the toilet and do dishes,” Haury told New York Focus. “I heated up a pot of water, I took a glass, and I would pour a glass over me and soap up, pour a couple of glasses over me to rinse off, and that was a shower.”

Veolia, the private provider that manages Buffalo’s water system, had offered Haury a payment plan—but he found even the reduced monthly payments to be unaffordable. He was one of over 2,500 households to face a water shutoff that year for nonpayment in Buffalo.

Haury lived without water for over a year until the pandemic hit in March 2020, when the city of Buffalo reconnected water for people who had been shut off. “It was so nice to be able to turn the shower on and just have it,” Haury recalled.

That July, New York passed a utility shutoff moratorium, which not only prevented water utilities from enacting shutoffs, but also gave the state an unprecedented role in regulating water utilities through a number of consumer protection and affordability requirements.

But with less than two months until the moratorium ends on December 21 and mounting customer utility debt across the state, the vast majority of the state’s water utilities are not complying with some of these requirements — and the agency tasked with implementing the law has not enforced them.

Meanwhile, the Hochul Administration, widely praised for speeding up the process of getting rental aid out the door, hasn’t distributed a single dollar of the approximately $70 million of federal water bill assistance set aside by the American Rescue Plan.

If consumers who can’t pay their bills submit a form certifying that they have lost income due to the Covid-19 pandemic, the law requires utilities to give them an additional 6 months before shutting off their water. But water affordability advocates say that many consumers haven’t been informed of this right and so won’t fill out the forms—which means that in the worst scenario, they could receive water shutoff notices this holiday season.

These advocates say the Hochul administration has done little to enforce a requirement that utilities inform consumers of their rights. “There’s been an unwillingness on the part of the Department of Public Service (DPS) to take this enforcement responsibility seriously, and they could not be more aware of the consequences of their failure to do so because we’ve been barraging them with the consequences ever since the law was enacted,” said Stephen Halpern, an attorney with the Western New York Law Center who represents clients facing shutoffs.

The DPS, the agency which oversees access to utilities, did not directly respond to questions about its lack of enforcement, but said that it lacks general regulatory authority over public water utilities and does not have data about water debt arrears.

“DPS has no knowledge of any entity planning on mass shutoffs,” a DPS spokesperson told New York Focus, adding that “while existing state law gives municipalities the authority to shut off customers for nonpayment, there is little incentive to do so.”

That sense that mass shutoffs are unlikely could help explain why the state doesn’t plan to release any water bill aid until January 1, 2022 at the earliest, according to grant applications submitted to the federal government.

Advocates working on water-related issues are pushing the state to speed up that timeline and to release the funds before the moratorium expires in December.

“Governor Hochul made getting backlogged rental relief out the door one of her first priorities. We hope she'll now turn her attention to getting New Yorkers desperately-needed water bill relief,” said Rob Hayes, the Director of Clean Water at the Environmental Advocates of New York. “It would be unconscionable to leave money sitting on the table while families are put at risk of losing their water or losing their home.”

Mounting Debts

Until last year, New York’s Public Service Commission (PSC), the entity within DPS that regulates energy utilities and private water utilities, had never taken a role in regulating the more than 1,000 public water utilities in the state.

But amid the public health and economic crisis of the pandemic, the utility shutoff moratorium passed by the state legislature assigned the ​​PSC a greater role. That left the commission with a problem on its hands that had been growing for decades: the rising cost of water in New York.

The DPS does not collect any data on how many municipal water utilities conduct shutoffs for nonpayment, and utilities are not required to publish information online about whether they do so. While New York City doesn’t shut off water for nonpayment, some of the state’s other largest utilities — in Suffolk County, Erie County, Monroe County, and Onondaga County, and the city of Rochester — do, according to their websites or bylaws.

Local health codes in many cases protect tenants against having their water shut off due to landlord nonpayment, but the same protections don’t apply to homeowners. The Suffolk County Water Authority, the second largest in the state, shut off 1 percent of its customers for nonpayment in 2016, the most recent year for which data is available.

Timothy Motz, spokesperson for the Suffolk County Water Authority, told New York Focus that it does not have plans to shut off people’s water on December 21, the day that the moratorium ends. “It is certainly our goal to not have to resort to shutoffs” in the long term, Motz said.

But whether or not they conduct shutoffs, many utilities use other means to collect debt, including selling liens for unpaid water bills—that is, selling the water debt to investors who can then foreclose on the home to recover the debt.

In New York City, such lien sales have been criticized for worsening the housing affordability crisis. According to a recent report by city comptroller Scott Stringer, water debt arrears in the city increased by 26% between the beginning of the pandemic and March 2021. The report noted that in 2020, of the more than 3,000 properties on the city’s lien sale list, 681 were listed solely because of water debt.

The state’s current shutoff moratorium includes prohibitions on these water debt liens, but its expiration in December means that hundreds of homeowners behind on their water bills could face foreclosures next year.

While the DPS does not collect state-wide data on the total number of households with water debt, New York Focus previously reported that water debts in the state have been mounting since the beginning of the pandemic. As of March 2021, 32,789 residential water customers in Suffolk County—about 10 percent of the county utility’s total customers—were behind on their bills and owed an average of $270. Motz, the Suffolk County utility’s spokesperson, told New York Focus that 1,300 customers have entered into payment plans since the moratorium was enacted.

Energy debt can also be a useful proxy for water debt, and the data shows that those debts have continued to mount. According to an analysis by the Public Utility Law Project of New York, nearly 300,000 residential utility customers owed a total of $888 million more in bills this August than before the pandemic began. A total of nearly 1.2 million accounts are in arrears, amounting to $1.7 billion, according to the analysis.

In other words, more than one in three households in the state are behind on their energy bills.

The shutoff moratorium included provisions that water advocates say should be made permanent in order to tackle the ongoing affordability crisis.

That included three essential features: the right of customers to self-certify that they had lost income during the pandemic in order to have an extra six months to pay off their debts; the right of customers to enter into an affordable payment plan; and a mandate that utilities inform customers of the first two rights.

But most water utilities in the state have failed to comply with that third provision, obligating them to inform customers.

Only about 1 in 20 water utilities in the state filed a mandatory copy of the notice they provided to customers informing them of these rights with the DPS, according to an analysis provided to New York Focus by advocacy groups working on water affordability and access, including Hayes’ organization, Food and Water Watch, the Western New York Law Center, the Public Utility Law Project of New York.

Of the utilities that did file such a notice, nearly half misstated the law, according to that analysis.

Richard Berkley, Executive Director of the Public Utility Law Project of New York, said the low compliance levels aren’t surprising, and point to the need for state-level coordination. “These are a bunch of utilities that are new to the regulatory process,” he said, referring to municipal water utilities.

The coalition has been pleading with the PSC to take a more active role in implementing the law — including by sending templates of compliant notices to utilities that may not realize they are in violation of the law — but they say they’ve been rebuffed.

Many of the small, private utilities, Berkeley said, don’t even have a lawyer on staff and lack the funding and administrative capacity to implement affordability measures without help from the PSC.

“The small private utilities lack the financial resources to do what they are supposed to do. The state has known that for years but not taken definitive action to deal with it,” he said.

The DPS spokesperson did not respond to questions about its approach to enforcing this provision.

Federal Aid

Beyond urging utilities to inform customers of their rights under the moratorium, the Hochul administration has another tool at its disposal to ward off shutoffs and foreclosures: $70 million in federal relief to distribute for water bill payment.

But according to the “grant implementation plan” submitted by the administration to the federal Department of Health and Human Services for those funds, part of a new Low Income Household Water Assistance Program, aid won’t start flowing until January 1 at the earliest.

Other states including California, Connecticut, Massachusetts and Texas indicated in their submitted plans that water relief funds would begin flowing this fall.

The state Office of Temporary and Disability Assistance (OTDA), tasked with distributing the aid, says it hopes to get the money out the door as soon as possible, but declined to provide specifics on the timeline. “We’ve never had a statewide water affordability program before, so we are starting from scratch,” an OTDA spokesperson told New York Focus.

Hayes said it should be a priority to get that money out of the door before the moratorium ends.

But even if it was disbursed tomorrow, he said, $70 million isn’t enough to relieve New Yorkers behind on their water bills given that with energy utility debt is over $1 billion.

Hochul could go further and allocate additional American Rescue Plan funds toward water assistance, Hayes said.

This summer, Buffalo Mayor Byron Brown did just that, announcing that the city would be providing amnesty for water bills using $13 million of its own ARP money. At the time of his announcement in July, over 30,000 households in the city were behind on their water bills. He also announced that the city would no longer shut off water for nonpayment.

Two winters ago, Haury, the Buffalo resident, was melting snow from his backyard to get a little bit of extra water.

“I’m 69 and a veteran of the US Navy, and nobody could help,” he said. Now, he is now on a payment plan and could benefit from Buffalo’s arrearage relief program, and doesn’t have to worry about the threat of a shutoff.

Across the state, others might not be so lucky.