KENT, Conn.—Connecticut utility regulators voted to block the sale of the Aquarion Water Company to a quasi-public entity on Wednesday, Nov. 19, following months of criticism from opponents who said the deal threatened to raise water rates for nearly 250,000 customers.
Kent is one of the 72 Connecticut towns and cities served by Aquarion, delivering approximately 56,000 gallons of potable water to about 610 residents each day. The water is collected in wells, treated and delivered to households and businesses through an extensive underground piping system
The Public Utilities Regulatory Authority voted 4-0, denying the utility’s sale to the South Central Regional Water Authority, known as RWA. PURA’s decision cited concerns with the proposed structure of a newly created entity to oversee Aquarion and its ability to meet its “managerial responsibility” to customers.
Eversource, Aquarion’s owner, announced its plan to sell the water utility to RWA in January as part of a deal worth $2.4 billion. The transaction involved $1.6 billion in cash and $800 million in debt.
Eversource sought to sell Aquarion to offset some of the $1.95-billion loss incurred by the parent company for off-shore wind development while allowing it to reinvest capital into its core electric and natural gas businesses
Last year, the Connecticut General Assembly passed legislation allowing the sale. “The special act approved by legislators in 2024 indicated that the state was interest in an expanded non-profit model,” said Jamie Ratliff, an Eversource spokesman. “However, once tested, that same act proved difficult to overcome for PURA to move away from an investor-owned model.”
RWA Chief Financial Officer Rochelle Kowalski said that the authority is reviewing PURA’s decision. “We believe the conversion of Aquarion to a not-for-profit, public authority would have been in the best interest of customers, communities, and employees, providing local control and significant long-term benefit, Kowalski said.
The sale would have handed control of Aquarion—the state’s largest water utility—to a new quasi-public entity, the Aquarion Water Authority, which would operate as a sister entity alongside RWA. The two water authorities would have shared a board of directors, chief executive officer and CFO.
Rates for the Aquarion Water Authority would have been controlled by a separate board made up of members from each of the cities and towns within its service area.
Critics of the deal had argued it would remove PURA’s oversight of Aquarion, which could lead to escalating costs for consumers. Under state law, PURA only approves rates for investor-owned utilities, not those that are publicly owned.
Utility officials projected that Aquarion’s customers would have seen annual rate increases of between 6.5 and 8.35 percent over the next next decade under the new quasi-public authority, according to filings submitted to PURA.
Additionally, opponents raised concerns that RWA would have had to borrow money to finance the sale, resulting in billions of dollars in interest payments passed along to customers.
Story courtesy of CT Mirror.