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Scarsdale, Village of, Westchester Joint Water Works, the City of White Plains, United Water New Rochelle and the Aquarion Water Company

September 12, 2008

STATE OF NEW YORK
DEPARTMENT OF ENVIRONMENTAL CONSERVATION
NOTICE OF PUBLIC HEARING

Petitioners: Village of Scarsdale, Westchester Joint Water Works, the City of White Plains, United Water New Rochelle and the Aquarion Water Company (Petitioners/Upstate Communities). Contact: Joel R. Dichter, Esq. and Kathy Lane, Esq., Newman Dichter, LLP, Attorneys at Law, 488 Madison Avenue, 10th Floor, New York, New York 10022. Telephone: 212-593-4202.

Effective July 1, 2004, the New York City Water Board (the Board) set a rate of $591.21 per million gallons (/MG) for users located outside New York City who take water from the City's water supply system. With a letter dated July 20, 2004, Joel R. Dichter, Esq., (Newman Dichter, LLP, New York) filed a petition with the New York State Department of Environmental Conservation on behalf of the Petitioners/Upstate Communities challenging the upstate water rate implemented by the Board on July 1, 2004. Subsequently, Petitioners/Upstate Communities provided additional information with a cover letter dated November 22, 2004.

Issues Conference: A pre-adjudicatory hearing issues conference will be held at 11:00 a.m. on October 23, 2008 at the Scarsdale Village Hall, 1004 Post Road, Scarsdale, New York 10583. The purpose of the issues conference is to define, narrow, and resolve, if possible, the proposed issues for adjudication. Any persons requesting party status must appear or be represented at the issues conference in order that all proposed issues may be fully discussed. The ALJ will advise the parties of the date for the adjudicatory hearing.

Parties to the Proceeding: The Petitioners/Upstate Communities identified above, the Board, and Staff from the Department of Environmental Conservation (Department staff) are parties to this proceeding. As outlined below, other persons may request party status.

Party Status: To participate in the adjudicatory hearing, persons must file a written petition requesting full party status, pursuant to 6 NYCRR 624.5 (also see 6 NYCRR 624.4[c]). Petitions for full party status must demonstrate that substantive and significant issues exist concerning the upstate water rate implemented by the Board on July 1, 2004. Please see 6 NYCRR 624.4 and 624.5 for further information about requesting full party status and identifying issues for adjudication.

All petitions requesting full party status to participate in the adjudicatory hearing must be received at the Office of Hearings and Mediation Services at the following address no later than 3:30 p.m. on October 10, 2008. Telefaxed copies will not be accepted. Petitions must be submitted to: Daniel P. O'Connell, Administrative Law Judge, New York State Department of Environmental Conservation, Office of Hearings and Mediation Services, 625 Broadway, Albany, New York 12233-1550 (Telephone: 518-402-9003).

All persons filing petitions must also send a copy of their petition at the same time and in the same manner to:

(1) Joel R. Dichter, Esq. and Kathy Lane, Esq., Newman Dichter, LLP, Attorneys at Law, 488 Madison Avenue, 10th Floor, New York, New York 10022 (Counsel for Upstate Communities);

(2) Gail Rubin, Esq., Chief, Affirmative Litigation and Sarah Stewart, Esq., City of New York, Law Department, 100 Church Street, Rm 20-098, New York, New York 10007-2601 (Counsel for the Board); and

(3) Scott Crisafulli, Esq., Office of General Counsel, New York State Department of Environmental Conservation, 625 Broadway, 14th Floor, Albany, New York 12233-1500 (Counsel for Department staff).

Document Availability: The following documents are available for review at the Board's Offices located at the New York City Department of Environmental Protection, 59-17 Junction Boulevard, 8th Floor, Flushing, New York 11373 (scheduling an appointment with Diane Easparro [718-595-3591] or Kevin Kunkle [718-595-3601] will ensure access into the building); the Scarsdale Village Hall at 1004 Post Road, Scarsdale, New York 10583; and the New York State Department of Environmental Conservation, Office of Hearings and Mediation Services, 625 Broadway, 1st Floor, Albany, New York 12233-1550:

(1) the Board's Report on the Cost of Supplying Water to Upstate Customers for the 2005 Rate Year by Black & Veatch New York, LLP, dated May 2004;

(2) Petitioners' Analysis of New York City Water Board Rates to the Upstate Communities for the 2005 Rate Year, Volume I, and Volume II, Appendices by Phillip S. Teumim, LLC, dated September 2006;

(3) the Board's Rebuttal Report prepared in response to the Teumim Analysis of New York City Water Board Rates to the Upstate Communities for the 2005 Rate Year and in further support of the New York City Water Board's Fiscal Year 2005 Rate, Volume I and Volume II - Exhibits, by Edward J. Markus, Amawalk Consulting Group, LLC, dated December 2006; and

(4) the Board's two Supplemental Reports entitled: New York City Water Board's Supplemental Report on Upstate Consultant's Fixed Asset Ratio in Support of Fiscal Year 2005 Rate, and New York City Water Board's Supplemental Report on Hydropower Revenues in Support of Fiscal Year 2005 Rate, by Edward J. Markus, Amawalk Consulting Group, LLC, dated November 2007.

Applicable Statutory and Regulatory Provisions: Administrative Code of the City of New York Water Supply Act § 24-360. Public Authorities Law § 1045-a et seq. Environmental Conservation Law (ECL) article 3, title 3 (General Functions); and article 15, title 9 (Water Resources). Also, title 6 of the Official Compilations of Codes, Rules and Regulations of the State of New York (6 NYCRR) part 603 (Applications for Fixation of Water Rates); and part 624 (Permit Hearing Procedures).

James T. McClymonds
Chief Administrative Law Judge

September 12, 2008
Albany, New York

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