89-c. General powers of commission in respect to water supply. The commission: 1. Shall have general supervision of all water-works corporations, as hereinbefore defined, having authority under any general or special law or under any charter or franchise to lay down, construct or maintain pipes, conduits, ducts or other fixtures in, on or under the streets, highways and public places of any municipality, for the purpose of furnishing or distributing water for domestic, commercial or public uses, and all water systems owned, leased or operated by any such water-works corporation; provided, however, that nothing herein contained shall be construed to delegate the general powers of the state department of health or of the water power and control commission or any of the powers and functions of either as provided by law, nor shall anything herein contained be construed to impair nor to deprive such department or commission of its powers and functions as now provided by law.
2. Shall have power of its own motion to examine and investigate the methods employed by water-works corporations in delivering and supplying water and furnishing equipment, and shall have access through its members or through an officer or employee specially authorized by it to make such examinations and investigations to all parts of the systems owned, used or operated for the distribution of water by any such corporation.
3. Shall have power, in its discretion, to prescribe uniform methods of keeping accounts, records and books to be observed by water-works corporations. It may also, in its discretion, prescribe by order forms of accounts, records and memoranda to be kept by such corporations. Notice of alterations by the commission in the required method or form of keeping a system of accounts shall be given to such corporations by the commission at least six months before the same shall take effect. Any other and additional forms of accounts, records and memoranda kept by such corporations shall be subject to examination by the commission.
4. Shall have power to examine all water-works corporations and keep informed as to the methods, practices, regulations and property employed by them in the transaction of their business. Whenever the commission shall be of the opinion, after a hearing had upon its own motion or upon complaint, that the rates, charges or classifications or the acts or regulations of any such corporation are unjust, unreasonable, unjustly discriminatory, or unduly preferential, or in any wise in violation of any provision of law, the commission shall determine and prescribe in the manner provided by and subject to the provisions of section eighty-nine-j of this chapter, the just and reasonable rates, charges and classifications thereafter to be enforced for the service to be rendered, notwithstanding that a different rate or charge has heretofore been prescribed by general or special statute, contract, grant, franchise, condition, consent or other agreement, and the just and reasonable acts and regulations to be done and observed; and whenever the commission shall be of opinion, after a hearing had upon its own motion or upon complaint, that the property, equipment or appliances of any such corporation are unsafe, inefficient or inadequate, the commission shall determine and prescribe the safe, efficient and adequate property, equipment and appliances thereafter to be used, maintained and operated for the security and accommodation of the public and in compliance with the provisions of law and of their franchises and charters; provided, however, that in its determination and prescription of safe, efficient and adequate property, equipment and appliances as herein provided any such property, equipment and appliances theretofore approved by the water power and control commission, or its predecessor, shall be deemed to have been adequate, safe and efficient at the time of such approval. Nothing herein contained shall be deemed to dispense with any approval of work by the water power and control commission required by the conservation law; and if such an approval pertains to work done pursuant to such determination or prescription of the public service commission, such approval shall be conclusive that the work was done in compliance with such determination or prescription.
5. Shall have power to require every water-works corporation, and it shall be the duty of every water-works corporation, as defined by this chapter, to file with the commission an annual report, verified by the oath of the president, vice-president, treasurer, secretary, manager, or receiver, if any, or by the person required to file the same. The verification shall be made by said official holding office at the time of filing said report, and if not made upon the knowledge of the person verifying the same, shall set forth the sources of his information and the grounds of his belief as to any matters not stated to be verified upon his knowledge. The report shall show in detail (a) the amount of its authorized capital stock and the amount thereof issued and outstanding; (b) the amount of its authorized bonded indebtedness and the amount of its bonds and other forms of evidence of indebtedness issued and outstanding; (c) its receipts and expenditures during the preceding year; (d) the amount paid as dividends upon its stock and as interest upon its bonds; (e) the names of its officers and the aggregate amount paid as salaries to them and the amount paid as wages to its employees; (f) the location of its plant or plants and system, with a full description of its property and franchises, stating in detail how each franchise stated to be owned was acquired; and (g) such other facts pertinent to the operation and maintenance of the plants and system, and the affairs of such person or corporation as may be required by the commission. Such reports shall be in the form, cover the period, and be filed at the time prescribed by the commission. The commission may, from time to time, make changes and additions in such forms. When any such report is defective or believed to be erroneous, the commission shall notify the corporation making such report to amend the same within a time prescribed by the commission. Any such corporation which shall neglect to make any such report or which shall fail to correct any such report within the time prescribed by the commission shall be liable to a penalty of one hundred dollars and an additional penalty of one hundred dollars for each day after the prescribed time for which it shall neglect to file or correct the same, to be sued for in the name of the people of the state of New York, if ordered by the commission. The amount recovered in any such action to be paid to the commission shall be paid into the state treasury and be credited to the general fund. The commission, for cause shown, may extend the time prescribed and, by compromise, may accept less than the amount of such a penalty, in settlement thereof.
6. Shall have power, either through its members or inspectors or employees duly authorized by it, to enter in or upon and to inspect the property, buildings, plants, pump houses, ducts, conduits and offices of any such water-works corporation.
7. Shall have power to examine the accounts, books, contracts, records, documents and papers of any water-works corporation, and have power, after a hearing, to prescribe by order the accounts in which particular outlays and receipts shall be entered, charged or credited. At any such hearing the burden of proof shall be on such corporation to establish the correctness of the accounts in which such outlays and receipts have been entered, and the commission may suspend a charge or credit pending submission of proof by such corporation.
8. Shall have power to compel, by subpoena duces tecum, the production of any accounts, books, contracts, records, documents, memoranda and papers. In lieu of requiring production of originals by subpoena duces tecum the commission or any commissioner may require sworn copies of any such books, records, contracts, documents and papers, or any parts thereof, to be filed with it. The commission may require of all such water-works corporations specific answers to questions upon which the commission may need information, and may also require such corporations to file periodic reports in the form, covering the period and filed at the time prescribed by the commission. If such corporation shall fail to make specific answer to any question or shall fail to make a periodic report when required by the commission as herein provided within the time and in the form prescribed by the commission for the making and filing of any such report or answer, such corporation shall forfeit to the state the sum of one hundred dollars for each and every day it shall continue to be in default with respect to such report or answer. Such forfeiture may be recovered in an action brought by the commission in the name of the people of the state of New York. The amount recovered in any such action, or paid to the commission, shall be paid into the state treasury and be credited to the general fund. The commission, for cause shown, may by compromise accept less than the amount of such forfeiture, in settlement thereof.
9. Shall have power in all parts of the state, either as a commission or through its members, or through an officer or employee specially authorized to conduct an investigation or hearing, to subpoena witnesses, take testimony and administer oaths to witnesses in any proceeding or examination instituted before it, or conducted by it in reference to any matter within its jurisdiction under this article.
10. (a) Shall have power to require every water-works corporation to file with the commission and to print and keep open to public inspection schedules showing all rates and charges made, established or enforced or to be charged or enforced, all forms of contract or agreement and all rules and regulations relating to rates, charges or service used or to be used, and all general privileges and facilities granted or allowed by such corporation; but this subdivision shall not apply to state, municipal or federal contracts.
(b) No change shall be made in any rate or charge, or in any form of contract or agreement or any rule or regulation relating to any rate, charge or service, or in any general privilege or facility, which shall have been filed by such a corporation, in compliance with an order of the commission, except after thirty days' notice to the commission and to each county, city, town and village served by such water-works corporation which had filed with such corporation, within the prior twelve months, a request for such notice and which shall be affected by such change and publication of a notice to the public of such proposed change once in each week for four successive weeks in a newspaper having general circulation in the county or counties containing territory affected by the proposed change, which notice shall plainly state the changes proposed and when the change will go into effect. The commission for good cause shown may, except in the case of major changes, allow changes to take effect prior to the end of such thirty-day period and without publication of notice to the public under such conditions as it may prescribe. The commission may delegate to the secretary of the commission its authority to approve a change to a schedule postponing the effective date of such schedule previously filed with the commission and to allow for good cause shown the postponement to take effect prior to the end of such thirty-day period and without publication of notice to the public.
(c) For the purpose of this subdivision, "major changes" shall mean an increase in the rates and charges which would increase the aggregate revenues of the applicant more than the greater of three hundred thousand dollars or two and one-half percent, but shall not include changes in rates, charges or rentals allowed to go into effect by the commission or made by the utility pursuant to an order of the commission after hearings held upon notice to the public.
(d) No such corporation shall charge, demand, collect or receive a greater or less or different compensation for any service rendered or to be rendered than the rates and charges specified in its schedule filed and in effect; nor shall any such corporation refund or remit in any manner or by any device any portion of the rates or charges so specified, nor extend to any person any form of contract or agreement, or any rule or regulation, or any privilege or facility, except such as are regularly and uniformly extended to all persons under like circumstances.
(e) The commission shall have power to prescribe the form of every such schedule and from time to time prescribe by order such changes in the form thereof as may be deemed wise. The commission shall also have power to establish such rules and regulations to carry into effect this subdivision as it may deem necessary, and to modify or amend such rules or regulations from time to time.
(f) Whenever there shall be filed with the commission by any water-works corporation any schedule stating a new rate or charge, or any change in any form of contract or agreement or any rule or regulation relating to any rate, charge or service, or in any general privilege or facility, the commission may, at any time within sixty days from the date when such schedule would or has become effective, either upon complaint or upon its own initiative, and, if it so orders, without answer or other formal pleading by the interested corporation, but upon reasonable notice, hold a hearing concerning the propriety of a change proposed by the filing. If such change is a major change, the commission shall hold such a hearing. Pending such hearing and decision thereon, the commission, upon filing with such schedule and delivering to the corporation affected thereby a statement in writing of its reasons therefor, may suspend the operation of such schedule, but not for a longer period than one hundred and twenty days beyond the time when it would otherwise go into effect. After a full hearing, whether completed before or after the schedule goes into effect, the commission may make such order in reference thereto as would be proper in a proceeding begun after the rate, charge, form of contract or agreement, rule, regulation, service, general privilege or facility had become effective. If any such hearing cannot be concluded within the period of suspension as above stated, the commission may extend the suspension for a further period not exceeding six months.
(g) The commission may, as authorized by section eighty-nine-j of this article, establish temporary rates or charges for any period of suspension under this section.
(h) At any hearing involving a rate, the burden of proof to show that the change or proposed change if proposed by the corporation, or that the existing rate, if it is proposed to reduce the rate, is just and reasonable shall be upon the corporation; and the commission may give to the hearing and decision of such questions preference over all other questions pending before it.
(i) The schedule, rates, charges, form of contract or agreement, rule, regulation, service, general privilege or facility in force when the new schedule, rate, charge, form of contract, rule, regulation, service, general privilege or facility was filed shall continue in force during the period of the suspension unless the commission shall establish a temporary rate or charge as authorized by section eighty-nine-j of this article.
11. In case any water-works corporation is engaged in carrying on any business other than owning, operating or managing a water system, which other business is not otherwise subject to the jurisdiction of the commission, and is so conducted that its operations are to be substantially kept separate and apart from the owning, operating, managing or controlling of such water system, said corporation in respect of such other business shall not be subject to any of the provisions of this chapter and shall not be required to procure the assent or authorization of the commission to any act in such other business or to make any report in respect thereof. But this subdivision shall not restrict or limit the powers of the commission in respect to the owning, operating, managing or controlling by such corporation of such water system, and said powers shall include also the right to inquire as to, and prescribe the apportionment of, capitalization, earnings, debts and expenses fairly and justly to be awarded to or borne by the ownership, operation, management or control of such water system as distinguished from such other business. In any such case, if the owning, operating, managing or controlling of such water system by any such corporation is wholly subsidiary and incidental to the other business carried on by it and is inconsiderable in amount and not general in its character, the commission may by general rules exempt such corporation from making full reports and from keeping of accounts as to such subsidiary and incidental business.
12. The commission shall have power to require each water-works corporation to establish classifications of service based upon the quantity used, the time when used, the purpose for which used, the duration of use and upon any other reasonable consideration, and to establish in connection therewith just and reasonable graduated rates and charges; and it shall have power, either upon complaint or upon its own motion, to require such changes in such classifications, rates and charges as it shall determine to be just and reasonable.
13. The commission, of its own motion or upon complaint of any person or corporation aggrieved, may investigate and determine whether the property of any corporation or person actually used within the state in the business of the distribution, sale or furnishing of water for domestic, commercial or public uses, exclusive of property used solely for or in connection with the business of bottling, or selling, distributing or furnishing bottled water, is of a value exceeding ten thousand dollars. Where such value is ten thousand dollars or less, the commission may require such persons and corporations to file with the commission simplified annual reports, in a form and containing such matters as the commission shall prescribe, and may prescribe simplified forms of accounts to be kept by them.
14. (a) Notwithstanding any other provision of law to the contrary, whenever real property owned by a water-works corporation is exempted from taxation pursuant to the provisions of section four hundred eighty-five-d of the real property tax law the rate or charge imposed by such corporation within the taxing jurisdiction providing for such exemption shall be set by the commission so as to reflect fully the reduction in cost of service resulting therefrom.
(b) Notwithstanding any other provision of law to the contrary, whenever a water-works corporation is the recipient of operating assistance provided by a city pursuant to the provisions of section twenty-one-e of the general city law, the rate or charge imposed by such corporation within such city shall be set by the commission so as to reflect fully the revenues to such corporation resulting therefrom.
15. The commission shall provide for management and operations audits of water-works corporations having annual gross revenues in excess of ten million dollars. Such audits shall include, but not be limited to, an investigation of the corporation's construction program planning in relation to the needs of its customers for reliable service and an evaluation of the efficiency of the company's operations. The commission shall have discretion to have such audits performed by its staff, or by independent auditors.
In every case in which the commission chooses to have the audit provided for in this subdivision performed by independent auditors, it shall have authority to select the auditors and to require the corporation being audited to enter into a contract with the auditors providing for their payment by such corporation. Such contract shall provide further that the auditors shall work for and under the direction of the commission according to such terms as the commission may determine are necessary and reasonable.
The commission shall have authority to direct the corporation to implement any recommendations resulting from such audits that it finds to be necessary and reasonable.
Upon the application of a water-works corporation for a major change in rates as defined in subdivision ten of this section, the commission shall review the corporation's compliance with the directions and recommendations made previously by the commission, as a result of the most recently completed management and operations audit undertaken pursuant to the provisions of this subdivision. The commission shall incorporate the findings of such review in its opinion or order.
16. Notwithstanding any general or special law, rule or regulation, the commission shall have the power to provide for the refund of any revenues received by any water-works corporation which cause the corporation to have revenues in the aggregate in excess of its authorized rate of return for a period of twelve months. The commission may initiate a proceeding with respect to such a refund after the conclusion of any such twelve month period.
Last modified: February 3, 2019