Eversource disclosed Tuesday that it will seek to raise rates for Aquarion Water customers by as much as 42 percent following a decision earlier this month by state utility regulators that blocked the sale of the business to a regional, non-profit water company.
The sought-after rate increase met with immediate political opposition. Eversource called it unavoidable, saying current Aquarion rates are now lower than what they were 12 years ago and the decision by the Public Utility Control Authority to block the sale also killed an agreement that would have resulted in a lower, short term increase.
“Consequently, Aquarion is left with no other option than to submit this filing to PURA as it is critical that the Company be in the position to meet its public-service obligation to provide safe and reliable water supply, including preservation of public health and fire protection and the development of a modernized water infrastructure system,” the company said in a regulatory filing.
Attorney General William Tong, a frequent utility critic in what has become a long-running battle between the industry and regulators, promised to fight a rate increase for Aquarion’s 688,000 customers.
“After running off their chief regulator, the utilities are rushing in with new demands for millions upon millions of dollars in rate hikes,” Tong said in a statement. “Eversource filed an excessive and unwarranted rate hike request back in 2022, and when they failed to support their bloated claims, they were stunned when PURA instead decreased their rates.”
“They appealed all the way to the Supreme Court and lost,” he said. “So then they concocted a new plan to offload Aquarion onto a new nonprofit that would have doubled rates. PURA was right to reject that bad idea as well. Now they are back seeking an even bigger rate hike for Aquarion. We’re going to do what we always do — comb through every line and every page of their filings to ensure Connecticut families aren’t paying a penny more than they need to,” said Tong.”
Tong was referring to the forced resignation of former PURA chairman Marissa Gillett in October. A month after the resignation, a Superior Court handed the utility industry a resounding victory, finding that under Gillett’s leadership, PURA broke an array of laws in order to impose what turned out to be flawed or illegal rate decisions.
In his decision, Superior Court Judge Matthew Budzik upheld every allegation two gas companies made in lawsuits seeking to overturn PURA rate decisions — allegations that Tong’s office conceded in court over the months leading to the ruling.
Budzik also took the unusual step of referring two PURA lawyers — one of whom is an assistant attorney general — for discipline in connection with what the court characterized as an effort by PURA to keep him from learning that Gillett and her chief of staff destroyed records that might have shown bias by Gillett.
Aquarion said in its regulatory filing that it is asking for an $88 million increase in what it charges for water in the 57 communities in which it operates. It was last granted its last rate increase by PURA in 2013. In 2022, it asked for an increase of about $35 million, but PURA instead cut revenue by $4 million.
“Since that time, Aquarion has had serious concerns that PURA’s determination in the 2022 rate case would, ultimately, cause a negative impact for customers by pushing costs ‘down the road’
and, unfortunately, this is the case,” Aquarion said in its regulatory filing.
In the regulatory filing, Aquarion said that at the end of last month, it had spent more than $488 million on improvements to its water delivery system without being able to recover the expenditures through rates. II said it expects to spend substantially more to meet new health and environmental standards, including measures to protect customers from polyfluoroalkyl or PFAS substances.
Regulators blocked the $2.4 billion Aquarion sale to the nonprofit South Central Connecticut Regional Water Authority a month ago, saying that while the proposed transaction was financially acceptable, the new nonprofit owner would have been exempt from regulatory control and customers could have faced significant water rate increases.
The 4-0 vote by the Public Utility Regulatory Authority follows months of political and consumer opposition to the sale.
CT is in the middle of major water fight. What the sides contend, including that ‘the deal stinks.’
At the time, Tong called the deal “a costly loser for Connecticut families “ and said “PURA was right to reject it.” Senate Republicans, with thousands of constituents in Aquarion service territory, said the sale “would have caused a tsunami of unending water rate spikes in cities and towns across Connecticut.”
Eversource is appealing the decision that killed the sale. The appeal argues that the legislature — as is required by law — voted to approve the terms of the sale of the regulated utility to an unregulated nonprofit. The appeal asserts that PURA lacks the legal authority to substitute its judgement of the public interest for that of the legislature.