PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following proposed rule:

The Commission is considering the amount by which New York American Water, Inc. (NYAW) over-collected property tax expenses from customers and the means of refunding such over-collections to ratepayers.

Property tax expenses and refunds of over-collections for such expenses.

To ensure just and reasonable rates.

The Commission is considering the amount by which New York American Water, Inc. (NYAW) over-collected property tax expenses from customers and the means of refunding such over-collections to ratepayers. On April 30, 2018, Department of Public Service Staff (Staff) filed a report with the Commission consisting of its review of NYAW’s calculation of its over-payments of property tax expenses and related customer impact. The Report determined that the customer impact of NYAW overpayment to taxing authorities totaled approximately $2.3 million. The Report recommends a refund to customers which would average $65.37 per customer. The Report also states that ratepayers could expect a $2.4 million reduction in future yearly rates due to the correction of the property tax assessments. The Report recommends revised property tax targets and related surcharges in the current rate plan. The Report supplies the Commission with three options for making ratepayers whole for the property tax errors: First, provide all ratepayers a monthly sur-credit of $4.57 for one year, using the variance during the previous rate plan with interest to offset the deferrals related to the cancelled $26.95 surcharge, and leave the authorized but uncollected deferral amounts unchanged; Second, subtract the deferrals on the Company’s book against the $2.3 million ratepayers impact and sur-credit the balance to ratepayers of $65.37 for one year; and Third, approve the net credits owed ratepayers from NYAW’s prior rate plan in Case 11-W-0472, but leave all regulatory assets resulted from previous rate plan on NYAW’s books, along with the customer impact during the current rate plan in Case 16-W-0259 for disposition through NYAW’s existing property tax reconciliation mechanisms. Staff recommends the second option. The Commission may choose one of the proposed options or decide on an alternative method of making ratepayers whole. The full text of the Staff Report and the full case record of the proceeding may be reviewed online at the Department of Public Service web page: www.dps.ny.gov. The Commission may adopt, reject or modify, in whole or in part, the action proposed and may resolve related matters.

John Pitucci, Public Service Commission, 3 Empire State Plaza, Albany, New York 12223-1350, (518) 486-2655, email: [email protected]

Kathleen H. Burgess, Secretary, Public Service Commission, 3 Empire State Plaza, Albany, New York 12223-1350, (518) 474-6530, email: [email protected]

60 days after publication of this notice.